INDEX

Sr. No. Chapter Pg.no

INTRODUCTION

2 3 4 5

OBJECTIVES PRINCIPLES CONCLUSIONS REFERENCES

6 7 66 67

South Asian Association for Regional Cooperation From Wikipedia the free encyclopedia Jump to: navigation, search South Asia Association for Regional Cooperation (SAARC)

Member- States Observer States Headquarters Official languages Demonym Membership Kathmandu, Nepal English South Asian 8 Members[show]
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9 Observers[show] Organization

Government Chairman Mohammed Manik Ahmed Saleem - Secretary General Establishment Area 5,130,746 km2 (7th1) - Total Population - 2009 estimate 1,600,000,000 (1st1) 304.9/km2 - Density 789.7/sq mi 2009 estimate GDP (PPP) - Total - Per capita Currency US$ 4,382,700 million (3rd1) US$ 2,779 See footnote 2 1,980,992 sq mi December 8, 1985 Waheed Hassan

Time zone Website www.saarc-sec.org

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(UTC+4 to +6)

If considered as a single entity. A unified currency has been proposed. Present currencies (ISO 4217 codes bracketed): Afghan afghani (AFG) Bangladeshi taka (BDT) Bhutanese ngultrum (BTN) Indian rupee (INR) Maldivian rufiyaa (MVR) Nepalese rupee (NPR)

Pakistani rupee (PKR) Sri Lankan rupee (LKR)

INTRODUCTION The South Asian Association for Regional Cooperation (SAARC) comprises Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. SAARC is a manifestation of the determination of the peoples of South Asia to work together towards finding solutions to their common problems in a spirit of friendship, trust and understanding and to create an order based on mutual respect, equity and shared benefits. The main goal of the Association is to accelerate the process of economic and social development in member states, through joint action in the agreed areas of cooperation. The idea of regional cooperation in South Asia was first mooted in November 1980. After consultations, the Foreign Secretaries of the seven countries met for the first time in Colombo, in April 1981. This was followed, a few months later, by the meeting of the Committee of the Whole, which identified five broad areas for regional cooperation. The Foreign Ministers, at their first meeting in New Delhi, in August 1983, formally launched the Integrated Programme of Action (IPA) through the adoption of the Declaration on South Asian Regional Cooperation (SARC). At the First Summit held in Dhaka on 7-8 December 1985, the Charter establishing the South Asian Association for Regional Cooperation (SAARC) was adopted.

OBJECTIVES The objectives, principles and general provisions, as mentioned in the SAARC Charter, are as follows : - To promote the welfare of the peoples of South Asia and to improve their quality of life; - To accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realise their full potentials; - To promote and strengthen collective self-reliance among the countries of South Asia; - To contribute to mutual trust, understanding and appreciation of one another's problems; - To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; - To strengthen cooperation with other developing countries; - To strengthen cooperation among themselves in international forums on matters of common interests; and - To cooperate with international and regional organizations with similar aims and purposes.

PRINCIPLES - Cooperation within the framework of the Association is based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in the internal affairs of other states and mutual benefit. - Such cooperation is to complement and not to substitute bilateral or multilateral cooperation. - Such cooperation should be consistent with bilateral and multilateral obligations of the member states. - Decisions at all levels in SAARC are taken on the basis of unanimity. - Bilateral and contentious issues are excluded from its deliberations.

INSTITUTIONAL STRUCTURE Summits The highest authority of the Association rests with the Heads of State or Government. During the period 1985-95, eight meetings of the Heads of State or Government had been held in Dhaka (1985), Bangalore (1986), Kathmandu (1987), Islamabad (1988), Mal (1990), Colombo (1991), Dhaka (1993), New Delhi (1995) and Male (1997) respectively. (see Summit Declaration of Male) Council of Ministers Comprising the Foreign Ministers of member states is responsible for the formulation of policies; reviewing progress; deciding on new areas of cooperation; establishing additional mechanisms as deemed necessary; and deciding on other matters of general interest to the Association. The Council meets twice a year and may also meet in extraordinary session by agreement of member states. It has held fifteen sessions till November 1995. Standing Committee Comprising the Foreign Secretaries of member states is entrusted with the overall monitoring and coordination of programmes and the modalities of financing; determining inter-sectoral priorities; mobilising regional and external resources; and identifying new areas of cooperation based on appropriate studies. It may meet as often as deemed necessary but in practice it meets twice a year and submits its reports to the Council of Ministers. It has held twenty regular sessions and two special sessions till November 1995. Programming Committee Comprising the senior officials meets prior to the Standing Committee sessions to scrutinize Secretariat Budget, finalise the Calendar of Activities and take up any other matter assigned to it by the Standing Committee. This Committee has held fifteen sessions till November 1995. Technical Committees
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Comprising representatives of member states, formulate programmes and prepare projects in their respective fields. They are responsible for monitoring the implementation of such activities and report to the Standing Committee. The chairmanship of each Technical Committee normally rotates among member countries in alphabetical order, every two years. At present, there are twelve Technical Committees. However, with the merger of the Technical Committees on Environment and Meteorology, beginning from 1st January 1996, the number of Technical Committees will be eleven. Action Committees According to the SAARC Charter, there is a provision for Action Committees comprising member states concerned with implementation of projects involving more than two, but not all member states. At present, there are no such Action Committees. Other Meetings During the first decade of SAARC, several other important meetings took place in specific contexts. A number of SAARC Ministerial Meetings have been held, to focus attention on specific areas of common concern and has become an integral part of the consultative structure.So far Ministerial-level Meetings have been held on International Economic Issues: -Islamabad (1986), Children - New Delhi (1986) & Colombo (1992), Women in Development - Shillong (1986) & Islamabad (1990), Environment - New Delhi (1992), Women and Family Health Kathmandu (1993), Disabled Persons Islamabad (1993), Youth Male' (1994), Poverty - Dhaka (1994) and Women : Towards the Fourth World Conference on Women in Beijing - Dhaka (1995). So far, six Meetings of Planners have been held, one in 1983 and five annually from 1987 to 1991. These meetings initiated cooperation in important areas such as Trade, Manufacturers and Services; Basic Needs; Human Resource Development; Data base on socio-economic indicators; Energy Modelling Techniques; Plan Modelling Techniques and Poverty Alleviation Strategies. In addition, a high level Committee on Economic Cooperation (CEC) has been established in 1991, for identifying and implementing programmes in the core area of economic and trade cooperation. A three-tier mechanism was put in place in 1995, to follow-up on the relevant SAARC decisions on Poverty Eradication. The tiers consist of Meeting of
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Secretaries in-Charge of Poverty Eradication, Meeting of Finance/Planning Secretaries, and Meeting of Finance/Planning Ministers.

SAARC secretariat Established in Kathmandu on 16 January 1987, the SAARC Secretariat is responsible to coordinate and monitor the implementation of SAARC activities, service the meetings of the Association and serve as the channel of communication between SAARC and other international organizations. The Secretariat comprises of the Secretary-General, a Director from each member state and the General Services Staff. The Secretary-General is appointed by the Council of Ministers upon nomination by a member state, on the principle of rotation in alphabetical order, for a period of two years. Mr. Abul Ahsan from Bangladesh was the first Secretary-General (16 January 1987 - 15 October 1989) followed by Mr. Kant Kishore Bhargava from India (17 October 1989 - 31 December 1991) and Mr. Ibrahim Hussain Zaki from the Maldives (1 January 1992 - 31 December 1993). The present Secretary-General, Mr. Yadab Kant Silwal from Nepal, assumed the office from 1 January 1994. The next Secretary-General from Pakistan, Mr. Naeemuddin Hasan will assume office on 1 January 1996. Directors are appointed by the Secretary-General, upon nomination by member states for a period of three years which, in special circumstances, may be extended by the Secretary-General for a period not exceeding another full term, in consultation with the member state concerned. Following are the Directors presently serving in the Secretariat: -Bangladesh : Mr. Liaquat Ali Choudhury (from -Bhutan : Ms. K.C. Namgyel (from -India : Mr. Ashok K. Attri (from -Maldives : Mr. Ahmed Latheef (from -Nepal : Mr. Prabal S.J.B. Rana (from -Pakistan : Mr. Tahir Iqbal Butt (from -Sri Lanka : Mr. Ranjith P. Jayasooriya (from 10.2.1995). FINANCIAL ARRANGEMENTS IN SAARC Member states make provision in their respective national budgets, for financing activities and programmes under the SAARC framework including contributions to the Secretariat budget and that of the regional institutions. The
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5.7.1995) 17.10.1995) 3.10.1994) 1.10.1993) 17.8.1992) 6.1.1994)

financial provision thus made is announced annually, at the meeting of the Standing Committee. The annual budget of the Secretariat, both for capital as well as recurrent expenditure, is shared by member states on the basis of an agreed formula. The initial cost of the main building of the Secretariat, together with all facilities and equipment, as well as that of the annex building completed in 1993 has been met by the host government. A minimum of forty percent of the institutional cost of regional institutions is borne by the respective host government and the balance is shared by all member states, according to an agreed formula. Capital expenditure of regional institutions which includes physical infrastructure, furnishing, machines, equipment etc. are normally borne by the respective host government. Programme expenditure of regional institutions is also shared by member states, according to the agreed formula. In the case of activities under the approved Calendar, the local expenses including hospitality, within agreed limits, are borne by the host Government, while the cost of air travel is met by the sending Government. INTEGRATED PROGRAMME OF ACTION (IPA) The IPA is a key component of the SAARC process and includes twelve agreed areas of cooperation, each being covered by a designated Technical Committee. In response to the emphasis given by successive Summits on the need to further consolidate and streamline IPA and to make it more result oriented, a comprehensive set of guidelines and procedures was adopted in 1992 for the rationalization of SAARC activities. As a result of this, there is now a greater focus on activities that would bring tangible benefits to the people of South Asia. The Secretary-General reports on the progress in the implementation of IPA to the Standing Committee, both at its inter-Summit and pre-Summit Sessions. The Standing Committee has also taken the initiative to review the institutional mechanisms and activities of the Association, including, the evaluation of the functioning of the Technical Committees, amalgamation/alteration of their mandate and also a review of the role of the Secretariat. Technical committee 1. Agriculture (TC01)
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Agriculture was among the original five areas identified for fostering regional cooperation. The first meeting of TC01 was held in 1983. Subsequently, Forestry was also included in the work of the Technical Committee. TC01 was instrumental in the setting up of SAARC Agricultural Information Centre (SAIC) at Dhaka in 1988 - the first SAARC regional institution. Member states have been exchanging Germplasm, Breeding Materials on Livestock and Fishery in accordance with the quarantine regulations in force in their respective countries. Prototypes of Farmtools and Equipment have been exchanged for trial and adaptation. Activities for Improved Livestock through Exchange of Animals, Frozen Semen and Vaccine have also been undertaken. The responsibility of compiling lists of institutions and disciplines capable of offering training in member countries has been entrusted to SAIC. Rice and Wheat-breeding Programmes for enhancing productivity have been conducted while Multilocation trials for various crops are being undertaken. Regular meetings of Counterpart Scientists is a very important feature of the Committee's programmes. The list of Counterpart Scientists in the twelve agreed areas of crops and disciplines have been finalised for networking. These are : Rice (Millet); Wheat; Oilseeds; Horticulture (Potato) Vegetables and Fruits; Fisheries; Forestry; Transfer of Technology; Livestock (Animal Health and Production); Farm Machinery and Implements; Post Harvest Technology; Agriculture Economics & Policies and Soils. Progress has been made towards establishing a network on Amelioration of Problem Soils. The programme for the 1990s focuses on Genetic Engineering and BioTechnology (for crop and livestock improvement, agricultural and horticultural development, embryo transfer technology for livestock and conservation of endangered germplasm); Homestead Vegetable Production; Food Availability and Nutritional Balance; Data Base on Technology and Training facilities in agricultural science within the SAARC countries; and meeting of the Expert Group on Crop Diseases. Two important project proposals namely i) Promotion of the "Bio-Villages, and (ii) Reaching the Million - Training of Farmers and Farm Women by 2000 A.D. have recently been completed and future course of action on these proposals is underway. 2. Communications (TC02) TC on Telecommunications and TC on Postal Services both established in 1983 which had hitherto functioned separately were amalgamated into a single TC on Communications with effect from 1993.
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With a view to bringing about an over-all improvement in the postal services in the region, the work programme in this sector included training, seminars, workshops study tours etc. Training programmes were held for First and Middle Level Officers and for Trainers as well as in Philately, International Postal Services, International Mail Accounting and Routing, Postal Management Services and Post Office Savings Banks. Seminars / Workshops were organized on Postal Operation and future challenges, Mechanization of Postal Operations, Agency functions, Financial Services, Caring for Customer, Expedited Mail Service (EMS), Circulation System of EMS and Postal Marketing. Study tours on Agency Services, Safety and Security of Postal Articles, Postal Services in Hilly or Rural Areas and New Mail and Financial Service in Pakistan were undertaken to gain first-hand knowledge of problems and plans for improvement of postal services. Since 1985, Letter Writing Competitions have been held annually. Studies had been undertaken on Productivity Measurement Techniques applied in postal operations, Postal Delays in SAARC region, Integration of Postal Services with rural development and Concessional Mail Tariff and Mail Transmission. Other activities undertaken include issuance of commemorative stamps, postage stamp displays and philatelic exhibitions. Within the overall objective of providing telecommunication services to majority of the rural population by the year 2000, TC02 has focused on efforts to promote technological and human resource development and management. There has been substantial progress in implementing the recommendations for the establishment of ISD, automatic telex, and bureaufax facilities, improvement of inter-country links, introduction of common collection charges and media independent tariff, adoption of SDR as common accounting unit and off-peak period tariff. Short-term activities in Telecommunications include Seminars/Workshops on Data Transmission, Digital Switching, Network Management, Operations, Software maintenance, Trends in External Plants practice, Adoption of new technologies in rural telecommunication system, Transition from analogue to digital transmission, improvement of quality services in telecommunications, IDR satellite technology and improvement of rural telecommunications. Training courses have also been held on new technologies for maintenance of switching systems, software development, financial management, packet switch data network and NEAX 61.
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3. Education, Culture and Sports (TC03) TC on Education (established in 1989) and TC on Sports, Arts and Culture (established in 1983) were amalgamated into a single TC on Education and Culture with effect from 1993. TC03 was renamed in 1995 as TC on Education, Culture and Sports. The priority themes identified for cooperation in the field of Education are Women and Education; Universal Primary Education; Literacy, Post Literacy and Continuing Education; Educational Research; Science and Technical Education, Education for the Underserved Areas and Distance Education. The nominations of Nodal Agencies for each of the priority themes have been completed and appropriate Action Plans are being prepared. Short-term activities in the field of Education include, Expert Group Meetings; Workshops/Seminars on the priority themes; Modernisation of Curriculum; Environmental Education including Population Education; Planning and Management of Education, Teacher Training, Higher Education and Book Production and Marketing. TC03 is also engaged in the improvement and expansion of the SAARC Chairs, Fellowships and Scholarships Scheme. Nodal Points for networking arrangement for sharing information on Mass Literacy Programmes have been identified. The modalities and operational framework for this purpose are being prepared. Short term activities in the field of Culture include six South Asian Archaeological Congresses; one History Conference; Workshops / Training / Seminars on Conservation of Wall Paintings, Documentation of Musical and Oral Traditions, Archives and Photographic Exhibitions of Monuments, National Heritage and an Expert Group Meeting on Preservation of Monuments and Archival Materials. In the field of Arts and Exhibition of Handicrafts; Workshops on Sea Based Crafts and Artisans at Work; and SAARC Painters Camp have been held. As part of the regional cooperation activities in Sports, Coaching Camps / Clinics have been conducted in Table Tennis, Squash, Hockey, Basketball, Swimming, Athletics and Volleyball. Training of Experts in Sparktaid has been conducted. Basketball and Football Tournaments and SAARC Marathons have been organised. 4. Environment (TC04)

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The Third SAARC Summit (Kathmandu, 1987) decided to commission a study on "Causes and Consequences of Natural Disasters and the Protection and Preservation of the Environment". National Studies were undertaken and subsequently consolidated into a Regional Study, which was approved by the Sixth SAARC Summit (Colombo, 1991). The recommendations of the above Regional Study were considered by the Committee on Environment (February 1992), which identified, for immediate action, measures for strengthening the environment management infrastructure; programmes on environmentally sound land and water use planning; research and action programme on mountain development in the Himalayan Region; coastal zone management programme; a SAARC forestry and watershed programme; programme on energy and environment; pollution control and hazardous waste management programme; a SAARC cooperative programme for biodiversity management; peoples participation in resource management; information exchange on low cost and environmentally sound habitat technologies; establishment of a SAARC relief and assistance mechanism for disaster and regional cooperation on the development of modern disaster warning systems. A special session of the Committee on Environment (November 1992) met to evolve specific programme activities and modalities to implement the above measures. The Fourth SAARC Summit (Islamabad, 1988) decided that a joint study be undertaken on "Greenhouse Effect and its Impact on the Region". National Studies prepared by member states were consolidated into a regional study, which was approved by the Seventh SAARC Summit (Dhaka, 1993). The Committee on Environment was designated as the Technical Committee on Environment and included within its purview, "Greenhouse Effect and its Impact on the Region". It began functioning from January 1, 1993. TC04 has identified measures for immediate action from among the recommendations and decided on a number of modalities for their implementation. These include, improving climate monitoring capability through networking arrangement and through SAARC Meteorological Research Centre (SMRC); developing climate change and sea-level rise scenario through country specific studies and sharing of information data in this respect; making available to member states expertise on climate research and monitoring Greenhouse Gases emission; identification of training and research institutions and ongoing programmes; exchange of information and data; exchange of

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experience on strategies for developing, mitigating and adaptive responses to climate change. TC04 also covers topics such as Approaches to Environmental Legislations, Regulations and Standards in SAARC countries; Rehabilitation of Degraded Lands; Training Course on Wetlands Assessment and Management; Workshop on Alternate/Renewable Energy and Workshop of SAARC National Experts on Climate Change. The urgent need to establish a networking approach through identified nodal points/institutions has also been stressed. A SAARC Environment Ministers Conference was held in New Delhi in April 1992 to evolve a joint position on the issues related to the UN Conference on Environment and Development (UNCED). SAARC also presented a common position paper to the Fourth World Conference on Natural Disaster Reduction (Yokohama, May 1994). TCs on Environment and Meteorology will be merged and designated as TC on Environment and Meteorology with effect from 1 January 1996. 5. Health and Population Activities (TC05) Health and Population Activities was one of the original five areas of cooperation identified by member states. The First Meeting of TC05 was held in 1984. The primary focus of TC05 has been on children, population welfare and policy, maternal and child health, primary health care, disabled and handicapped persons, control and eradication of major diseases in the region such as malaria, leprosy, tuberculosis, diarrhea diseases, rabies, AIDS, and iodine deficiency disorder. Important activities undertaken by TC05 include the setting up of the SAARC Tuberculosis Centre (STC), in Kathmandu in 1992, devising a standard Format for preparing the Annual Review of the Situation of Children in the SAARC region; establishment of networking arrangements for training, research and eradication of malaria and regional approach for combating major diseases in the region. A Directory of training programmes in six priority areas, i.e. malaria, tuberculosis, leprosy, diarrhoeal diseases, human rabies and maternal and child health have been prepared and circulated. In addition, several status papers on important subjects relating to health have been circulated among member states. The Second SAARC Summit (Bangalore, 1986) decided that the survival, protection and development of Children should be given highest priority and directed that annual reviews be undertaken on the situation of children in
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SAARC countries. Such annual reviews for the years 1993 and 1994 have been completed by TC05 based on annual country reports submitted by member states. These annual reviews have indicated, inter-alia, reduction of infant mortality and significant progress in the immunisation programme for children in the region. TC05 will be renamed as TC on Health, Population Activities and Child Welfare with effect from 1 January 1996.

6. Meteorology (TC06) Meteorology was also one of the five areas of cooperation initially identified by member states. The first meeting of TC06 was held in 1984. Since its inception, the Committee has been involved in organizing seminars/workshops in areas such as Joint Inter-Comparison of Barometers, Meteorological Instruments, Agricultural Meteorology, Numerical Weather Prediction, Crop-Weather relationship and Crop-Yield Forecast, Long Range Weather Forecasting, Radar Meteorology etc. Training programmes have been conducted on Meteorological Tele-communications, Management and Establishment of National Data Centers, Monsoon Forecasting etc. State-of-the-art Reports on Western Disturbances, Tropical Cyclones including Prediction of Recurvature, Thunder Storms, Long Range Forecasting of Monsoon Rain, Short Range Prediction of Monsoon and Norwesters, Tornadoes and Water Sprouts, have been completed. Expert panels have been convened on specialized fields such as Agrometeorology; Climatology and Data Exchange; and Instrumentation. An Annual Regional Award is given to a young scientist or a group of scientists for a research paper on meteorological topics to encourage research in the field of Meteorology. Another Award has been introduced since 1995 for senior scientists to encourage research work in the field of Meteorology. The programmes for 1990s identified by the Committee include, the establishment of National Data Centers, conducting studies on Meteorological aspects of Environment Pollution, establishment of Port Meteorological Offices for obtaining Data from Ocean areas. TC06 has also identified long-term measures, such as creation of a Regional Data Bank, Organization of Research Flight Facilities for probing cyclones, networking for Drifting and Anchored Buoys in Oceanic Regions, Environmental Pollution Monitoring stations, Preparation of Atlases of Meteorological Parameters and Familiarization with Computer Technology as needed for meteorological research, including visits to computer centers and cost of consumable.
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TCs on Meteorology and Environment will be merged and designated as TC on Environment and Meteorology with effect from 1 January 1996. 7. Prevention of Drug Trafficking and Drug Abuse (TC07) Since its establishment in 1987, TC07 has implemented a number of programmes in law enforcement, prevention, treatment and rehabilitation as essential elements of a coordinated regional strategy in combating drug trafficking and drug abuse. It contributed significantly towards the finalisation of the SAARC Convention on Narcotic Drugs and Psychotropic Substances in November 1990, which came into force in September 1993 upon its ratification by all member states. Cooperation among Drug Law Enforcement Agencies and Officers is being developed through short-term activities such as Seminars and Training Courses. Nodal Agencies in member states have been nominated to exchange information and intelligence on drug offences. The SAARC Drug Offences Monitoring Desk (SDOMD) has been established in Colombo to collate, analyse and disseminate information on drug offences. Efforts are afoot for further strengthening SDOMD. In the field of demand reduction, short-term activities such as workshops/ seminars held so far have focused on the role of media in drug abuse prevention, community mobilization against drug abuse, preventive education, school curriculum development, treatment and relapse prevention and exchange of information on indigenous and innovative methods of treatment. A networking arrangement among Nodal Institutions in drug abuse prevention is being established. Meetings of selected NGOs involved in Drug Abuse Prevention have been held. A Directory of such Organisations has been compiled in order to promote greater interaction among them. The Colombo Plan Bureau's Project Proposal and the establishment of working relations between SAARC and the Colombo Plan Bureau were approved by the Twentieth Session of the Standing Committee. This will promote and encourage cooperation among NGOs in SAARC countries involved in anti-narcotics activities. Efforts have been directed at promoting SAARC member states' accession to the relevant UN Conventions, conclusion of Regional and Drug Convention and harmonisation and consolidation of national drug laws. A Memorandum of Understanding for cooperation between SAARC and the United Nations International Drug Control Programme (UNDCP) has been signed. 8. Rural Development (TC08)
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Rural Development is one of the five original areas identified for cooperation under the IPA. The first meeting of the Committee was held in 1984. Specific activities taken up by the Technical Committee include, exchange of information and literature among member states on issues relating to rural development, preparation of research studies on selected topics, compilation of lists of experts, training institutes, and institutions involved in transfer of appropriate technology in member states, with a view to exchanging expertise and sharing training facilities within the region. Several workshops/seminars and training courses covering practically all aspects of rural development including regional planning, poverty focused development, rural energy, design of agricultural projects, local level planning, inter-country comparisons, appropriate technology, disaster management, rural child development, rural sociology, peoples participation, rural water supply, employment generation, social forestry, rural communication and development of agricultural markets have been conducted in member states under the TC08. Priority areas identified by TC08 for the 1990s for the selection of well identified, target-oriented and time bound programmes are Poverty Alleviation, Employment, Human Resource Development and Organization of Rural Poor, Women in Development, Sustainable Rural Development, Environment and Technology transfer. The decision to establish a Shelter Information Network "SHELTERNET" has been followed up by an Expert Group meeting which has defined its objectives and prepared detailed financial cost-estimates as well as operational modalities for final approval. The Committee has also been entrusted with the work relating to the SAARC Youth Volunteers Programme (SYVOP) since November 1989. 9. Science and Technology (TC09) Since its establishment in 1983, TC09 has undertaken a wide variety of programmes which include short-term activities such as Seminars/Workshops, Training Programmes, Joint Research Projects, preparation of State-of-the-art Reports and compilation of Directories. Seminars/Workshops/ Meetings of Experts held so far were on: Post Harvest and Food Technology; Renewable Energy Resources; Photovoltaic; Pesticides; Instrumentation, Maintenance and Calibration, Cultivation and Processing of Medicine and Aromatic Plants; Delivery System of Improved Stoves for Rural Users; Low Cost Housing Technology Diffusion in Rural Areas; Treatment of Drinking Water in Rural and Urban areas; Science Policy; Low Cost Scientific
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Educational Equipment; Bio-Fertilizer Technology; Bio-Mass Gasification; Recycling of Waste Water and Development of Technologies for Pollution Control; Technology Information and its Linkages; Biological Control of Plant Pests; Immunodiagnostics; Ore Benefaction; Energy Modeling Techniques; Solar Thermal Technology; Technological Aspects of Low Cost Housing; Examination of Operational System of Rural Electrification Cooperative; and Short Course on Technology Assessment and Technology Diffusion. Training Programmes have also been held for Scientists and Technologists on Tannery Waste Management, Low Cost Housing, Development of Prawn Hatcheries, Electronics and Molecular Biology. In addition, Joint Research Projects on Design and Manufacture of Food Processing Equipment and Appropriate Post Harvest Food Technology for Perishable Items have been carried out. State-of-the-art Reports have been completed on Bio-Gas; Mineral Resources Exploration; Producer Gas; Application of Remote Sensing Techniques; and Use of Organic Fertilizers. The Report currently under preparation include Building Materials and Technologies; Integrated Management of Tannery Waste; Selected Rural Technologies; Food Processing Technologies and Handicrafts; Local Electronic Products in the SAARC Region; and Biotechnology. Directories are being prepared on Specialized Analytical Instrumentation Facilities and Techniques; and Process Engineering/Pilot Plant Facilities in Agro Food Processing. Networking Arrangements are being established in the fields of Bio-technology and Genetic Engineering, Energy Modeling Techniques, Technology Information and Low Cost Housing and Building Technologies. 10. Tourism (TC10) TC10 was established in 1991 to promote cooperation in the field of tourism in the region. At its first meeting held in Colombo in October 1991, the Committee decided on an Action Plan on Tourism to promote cooperation in the areas such as training programmes, exchange of information, joint promotion, jointventure investment, intraregional tourism etc. It also reviewed progress on the SAARC Scheme for Promotion of Organized Tourism. These topics have formed an integral part of the agenda of the five Meetings of this Committee which have been held so far. Under the purview of TC10, member countries have exchanged information on training facilities existing in the region and a number of slots for providing
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training in the field of tourism and hotel management were offered. TC10 has decided upon steps to produce joint tourism brochure, SAARC Travel Guide and joint-production of SAARC tourism promotional film on the theme "A Unique Holiday with Diversity : From Top of the World to the Sunny beaches". Activities such as familiarisation tours and Food Festival in member states were also identified. Steps were also taken to coordinate the participation of SAARC member states in international tourism fairs. Emphasis is also being placed on the importance of early launching of the SAARC Scheme for Promotion of Organised Tourism. 11. Transport (TC11) In recognition of the importance of the transport sector, TC11 was set up in 1983. The work of the Technical Committee covers three major segments of transport, i.e. land transport, divided into roadways and railways; sea transport sub-divided into inland waterways and shipping; and air transport. The activities of TC11 cover exchange of data and information, preparation of status papers, compilation of data-base and directories of consultancy centres for transport sector. Seminars and Workshops have covered areas such as Material and Cost of Road Construction, Maintenance of Roads, Rural Roads, Road transportation and safety; Containerisation for Railways, Urban transportation, Inland Water Transport, Maritime Transport etc. Training Courses have included Corporate Planning for Railway sector, Highway and Bridge Engineering. A Compendia of Information on Roads in the SAARC region has been completed and similarly data on Railway Transport has been compiled. Two important Directories - one on Centres of Excellence and the other on Consultants and Experts in the field of transport are being prepared. An important Study on "In-depth examination of Transport Infrastructure and Transit Facilities so as to come up with viable proposals for Improvement" has recently been completed. The activities held under the Transport Sector, so far, have helped in fostering better cooperation among member countries and resulted in the dissemination and exchange of data, expertise, information and experiences. The work programme for the 1990s covers a wide range of issues related to rail, sea and air transportation. Recently, four new areas of cooperation in the Transport Sector have been identified by the Committee: Transport Safety, Rural Transport, Environmental Aspects, and Energy Conservation. Two new proposals : "Establishing Joint Venture Operations to provide Container Liner Shipping Services for Long Haul Trade Routes" and "Consultancy/Contracting
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Joint Ventures in the Transport Sector in the SAARC Region" are also being considered by the Technical Committee. Transport is a vital area in providing access to products to markets and opening up new areas of productivity. Especially now with the signing of Agreement on SAARC Preferential Trading Arrangement (SAPTA) this sector has even a more crucial role to play in intra-SAARC trade. 12. Women in Development (TC12) Women in Development was included as an area of cooperation under the IPA in 1986. Specific issues taken up by TC12 include, preparation of a Regional Plan of Action for Women, effective dissemination of technical information relating to women in development generated by member states, preparation of Guide Books on Women in Development by member states etc. SAARC Women's Journals on specific themes relating to women in development have been published to coincide with important events like SAARC Summits. On the recommendation of the Committee, 1990 was designated as the "SAARC Year of the Girl-Child" and subsequently 1991-2000 A.D. declared as the "SAARC Decade of the Girl-Child". A SAARC Plan of Action has been drawn up to observe the decade in order to highlight the gender disparities in the region and to promote the welfare of the Girl-Child. Member states are now in the process of implementing the Plan of Action. In this connection SAARC would be conducting a comprehensive mid-decade review for presentation to the Ninth SAARC Summit. SAARC has recognised the serious threat faced by certain groups of Girl Children in Especially Difficult Circumstances (GCEDC) and decided that an urgent appraisal of the situation of these children be undertaken and presented to the Ninth SAARC Summit. Several short-term activities like seminars, workshops and training courses have been held in the areas of women in law, women and environment, women's education and training, women's employment, women in agriculture and extension etc. Several activities related to different aspects of the Girl-Child have also been held under the Committee. Exhibitions on Handicrafts and Design by Women have also been organised by member states. A Women's Cell has been established in the SAARC Secretariat to act as a Data Bank and a store house of information on Women in Development in the region. It will also act as a forum for coordination among member states and other TCs.

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A SAARC collective position on issues before the Fourth World Conference on Women in Beijing in September 1995 had been formulated and a "SAARC Ministerial Meeting on Women: Towards the Fourth World Conference on Women in Beijing" has been held and the Dhaka Resolution adopted at the meeting provided additional input from SAARC Countries to the Beijing Conference. Girl representatives present the Girl-Child's Appeal to the Heads of State or Government during the Fifth SAARC Summit (Male', November 1990) POVERTY ERADICATION The Sixth SAARC Summit (Colombo, 1991) accorded the highest priority to the alleviation of poverty in South Asia and decided to establish an Independent South Asian Commission on Poverty Alleviation (ISACPA) consisting of eminent persons from member states to conduct an in-depth study of the diverse experiences of member states and report their recommendations on the alleviation of poverty to the Seventh Summit. A consensus on poverty eradication was adopted at the Seventh SAARC Summit (Dhaka, 1993). The Summit welcomed the ISACPA report and expressed its commitment to eradicate poverty from South Asia preferably by the Year 2002 through an agenda of action which would, inter-alia, include a strategy of social mobilization, policy of decentralised agricultural development and small-scale labour-intensive industrialisation and human development. The Summit also stressed that within the conceptual approach of "Dhal-Bhaat", the right to work and primary education should receive priority. It also underscored the critical links between the success of national efforts at poverty alleviation and relevant external factors. The Summit urged major actors in the world economic scene to create an enabling atmosphere supportive of poverty alleviation programmes and expressed the need for a new dialogue with donors for this purpose. The call for a new dialogue with donors has led to important initiatives in this respect, among which was the SAARC/World Bank Informal Workshop on Poverty Reduction in South Asia (Annapolis, USA, October 1993). UNDP and ESCAP are formulating proposals for cooperation with SAARC in Poverty Reduction. The Eighth SAARC Summit (New Delhi, May 1995) endorsed the recommendations of the Finance/Planning Ministers (Dhaka, July 1994) to establish a three-tier mechanism for exchanging information on poverty eradication. India hosted the meetings of the first and the second tier in New Delhi (September 1995). The meeting of the first tier

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Group of Secretaries dealing with Poverty Eradication and Social Development in Member Countries during their meeting in New Delhi to address Poverty Eradication issues in the region. which constituted the Group of Secretaries to the Governments in the Ministries / Departments concerned with poverty eradication and social development in SAARC countries, underscored the need to give a distinct status and top priority to pro-poor plans in member countries ensuring specific commitment of adequate resource and organisational support. It also stressed the necessity to involve the poor in the formulation and implementation of plans meant for them through participatory institutions and process at grass root levels. The member states were also urged to evolve mechanisms to evaluate the efficacy of pro-poor plans and develop appropriate socio-economic indicators relevant for the purpose. On specific issues germane to poverty eradication, the meeting emphasised the need to pursue an integrated approach taking into account the critical linkages among various sectors. The Meeting of the second-tier, i.e. Finance and Planning Secretaries, endorsed the recommendation of the first-tier and emphasised that poverty eradication should be viewed in the overall context of accelerating economic growth resulting in resulting in employment generation in an environment of macroeconomic stability with emphasis on overall human resource development. The meeting also put special emphasis on the need to improving the implementation of poverty eradication programmes through devolution of power and decentralisation. A special mention was also made in the meeting on the need to ensure the sustainability of these programmes, especially through ensuring their recurring cost. The Meeting of the third-tier Finance and Planning Ministers, is proposed to he held in India on 3-4 January 1996 which will consider the second-tier Report. Its recommendations will be submitted to the Ninth SAARC Summit through the Council of Ministers. TRADE AND ECONOMIC COOPERATION SAARC has taken important steps to expand cooperation among member countries in the core economic areas. In 1991, a Regional Study on Trade, Manufactures and Services (TMS) was completed outlining a number of recommendations for promoting regional cooperation in the core economic areas. The Council of Ministers at its Ninth Session in Mal in July 1991 endorsed the Study and decided to set up a high-level Committee on Economic Cooperation (CEC). This Committee has so far held six meetings. At the Colombo Summit in December 1991, the Heads of State or Government approved the establishment of an InterGovernmental Group (IGG) to seek
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agreement on an institutional framework under which specific measures for trade liberalization among SAARC member states could be furthered. IGG evolved a draft Agreement on SAARC Preferential Trading Arrangement (SAPTA) during its first two Meetings. Subsequently, the Council of Ministers, upon the recommendation of CEC signed the framework Agreement on SAPTA in Dhaka on 11 April 1993 during the Seventh SAARC Summit. In the subsequent four Meetings of IGG, the member states conducted their bilateral/multilateral trade negotiations in which they exchanged concessions to be offered/sought. The Consolidated National Schedules of Concessions were finalised in the Sixth Meeting of the IGG held at the SAARC Secretariat, Kathmandu on 20-21 April 1995 and subsequently approved by the Council of Ministers in May 1995. All SAARC member countries have ratified the SAPTA Agreement and as per Article 22 of the Agreement, SAPTA will enter into force on 7th December 1995 - two years ahead of the time schedule envisaged initially. The Council of Ministers at its Fifteenth Session agreed that the full and timely realisation of the benefits of regional economic cooperation required (a) the implementation of other related measures such as the removal of paratariff, non-tariff and other trade control barriers within the specific timeframes and (b) eventual progression to the creation of a free-trade area in the region. The Heads of State or Government at their Eighth SAARC Summit (New Delhi, May 1995) noted with satisfaction that the first round of trade negotiations under SAPTA has been completed. They reiterated their firm belief that the operationalisation of SAPTA will herald the beginning of a new and significant process of regional cooperation and would lend strength to SAARC as an institution for promoting the welfare of the peoples of South Asia. CEC at its Sixth Meeting (New Delhi, November 1995) recommended that with the operationalisation of SAARC Preferential Trading Arrangement (SAPTA), it is now desirable to work towards removal of para-tariff and non-tariff barriers, widening and deepening the tariff cuts and expanding the list of products to be included for intra-SAARC preferential trade under SAPTA. It reiterated that the South Asian Free Trade Area (SAFTA) is a clear eventual goal, at the same time it noted that the progress towards it may have to be in gradual stages. To push the SAPTA process forward, it recommended that the Inter-Governmental Group on Trade Liberalisation be reconvened to conduct the Second Round of Trade Negotiations under SAPTA and proposed that the first meeting of the second round may take place in early 1996 and appreciated
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the offer of Sri Lanka to host the same. The Committee also recommended that the first Meeting of the Committee of Participants of SAPTA may be held in the third quarter of 1996 to review the progress in the implementation of the Agreement. Each member country will notify the SAARC Secretariat and the SAARC Chamber of Commerce and Industry about their overseas bulk purchases. A Group of Experts from Research Institutions of Member States have been requested to commission a tripartite study involving governments, business and academic sectors to accelerate the process of eventual progression to the creation of a free-trade area in the region. The following initiatives have also been taken towards promoting trade cooperation within the region: i. Cooperation in the field of Handicrafts and Cottage Industries A Group of Experts on Joint Ventures in Handicrafts and Cottage Industries was established in 1991 pursuant to the decision of the Fifth SAARC Summit (Mal, 1990). So far, the Group has held two meetings in which it has identified an indicative list of crafts and industries for the purpose of mutual cooperation. Out of this list, the Group has selected six sectors namely: hand knotted carpets, beekeeping and honey production, handloom textile products (including embroidery), leather products (including leather garments), wooden handicrafts and pottery and ceramic products as priority areas. It has made several recommendations regarding development of marketing and export promotion, design development, procurement and supply of certain raw material, skill upgradation and transfer of technology, entrepreneurship development. The implementation of these recommendations is reviewed regularly by the Committee on Economic Cooperation (CEC). At its Sixth Meeting in New Delhi in November 1995, CEC urged member states to take all necessary steps for the speedy implementation of these recommendations. The Committee requested the Secretariat to coordinate organisation of other agreed activities through consultations with member states as appropriate. ii. Study on Transport Infrastructure and Transit Facilities The CEC was directed by the Council of Ministers at its Eleventh Session (Colombo, July 1992) to specify appropriate steps for further improvement of transport infrastructure and transit facilities in the region to accelerate the growth of trade within and outside the region. Subsequent to this, a consultancy report was prepared on the subject by the Institute for Sustainable Development, Kathmandu. The Report was considered by the CEC at its Sixth Meeting in
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New Delhi in November 1995. The CEC requested the member states to complete their examination of the Report urgently. PROMOTING PEOPLE-TO-PEOPLE CONTACT 1. The Second SAARC Summit (Bangalore, 1986) laid special emphasis on promoting people-to-people contact in the region and approved the following five initiatives in this regard: i. SAARC Audio-Visual Exchange (SAVE) Programme The SAVE programmes comprise of regular TV and Radio Programmes which are being telecast/broadcast on the 1st and 15th of each month respectively in all SAARC member countries. SAVE Radio and TV Quiz Programmes are also being held at regular intervals and have evoked keen interest among the youth. The other programmes include joint productions on specific Themes such as Environment, Disabled Persons and Youth. SAVE has proved to be an effective medium for promoting South Asian consciousness amongst the peoples of the region and for establishing people-to-people contact. ii. SAARC Documentation Centre (SDC) The Centre has been established to provide ready access to reliable and up-todate information on technical, scientific and development matters. iii. SAARC Scheme for Promotion of Organised Tourism The Scheme was initiated with the over-all objective of people-to-people contact in the region and more specifically as a step to facilitate development of intra-regional tourism. Confessional air fare to the tourists travelling under the Scheme is now under the consideration of the Technical Committee on Tourism which is presently taking necessary action to ensure early implementation of the Scheme. iv. SAARC Chairs, Fellowships and Scholarships Scheme The SAARC Chairs, Fellowships and Scholarships Scheme was instituted with the aim of providing increased cross-fertilization of ideas through greater interaction among students, scholars and academics in the SAARC Countries. This Scheme has now been brought under the purview of the Technical Committee on Education, Culture and Sports. v. SAARC Youth Volunteers Programme (SYVOP)

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1.The main objective of the SYVOP is to harness the idealism of Youth for regional cooperation programmes by enabling them to work in other countries in the field of agriculture and forestry extension work. SYVOP was brought under the purview of the Technical Committee on Rural Development in 1989. Seven activities have so far been held in the member countries under this programme. 2. Other initiatives taken by the Organisation for promoting people-to-people contact include the following : 1. SAARC Visa Exemption Scheme In order to further promote closer and more frequent contacts among the peoples of the region, the SAARC Visa Exemption Scheme was initiated in 1988. The Scheme became operational from March 1, 1992 and so far about 1600 visas have been issued under the Scheme. Currently, persons entitled to the Scheme are the Supreme Court Judges, Members of the National Parliaments, Heads of National Academic Institutions, Foreign/Permanent Secretaries dealing with foreign affairs, SAARC Secretary-General and Directors of the SAARC Secretariat, Presidents of National Chambers of Commerce and Industry and their accompanying spouses and dependent children below 18 years of age. 2. South Asian Festivals The First South Asian Festival was held in India from 9-24 October 1992 with popular participation from all member states. The festival which included performing arts, exhibitions and seminars was a unique event and served to enhance the interaction and strengthened the affinities among the peoples of South Asia. The festival also served to focus on the civilisational personality of South Asia manifested in the rich heritage of its art forms, architecture, literature, theater and films. South Asian Festivals covering selected areas would be organised in future in member countries. 3. Non-Governmental Organizations (NGOs) SAARC has emphasized the need for strengthening intergovernmental efforts with increased peopletopeople contacts through greater participation of NGOs, including professional bodies in the private sector, to promote socio-economic and cultural development of South Asia. In this context, a set of guidelines and procedures for granting recognition by SAARC to Regional Apex Bodies has been formulated.
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While the following regional apex bodies have been welcomed/granted recognition by SAARC, applications for recognition from several other apex bodies of professionals such as architects, accountants, university women etc. are presently under consideration : (i) Association of SAARC Speakers and Parliamentarians The Speakers of Parliaments of SAARC Countries first met in Sri Lanka in June 1992 and resolved to set up an Association of SAARC Speakers and Parliamentarians. They met in Kathmandu in November 1992 and The First South Asian Festival held in India (October 1992) with participation from all Member Countries was a unique event which focused on the rich cultural heritage of South Asia formally launched the "Association of SAARC Speakers and Parliamentarians" and adopted the Charter of the Association. The Speakers Council which is the Apex Body of the Association finalised and ratified the draft rules of the Association prepared by the Parliamentary Secretaries-General in January 1994. Since then they have met periodically and addressed issues of common interest to member countries. The Heads of State or Government at their Seventh Summit (Dhaka, April 1993) welcomed the initiative of the Speakers of Parliaments of SAARC Countries in forming the Association (ii) SAARC Chamber of Commerce and Industry (SCCI) The SAARC Chamber of Commerce and Industry (SCCI) was recognised by SAARC in December 1992. SCCI has established its headquarters at Karachi and national units in all seven SAARC countries. Mr. S.M. Inam was elected as the first President of SCCI. The establishment of SCCI is a significant development and it will act as a dynamic instrument of promoting regional cooperation in the areas of trade and economic relations. The SAARC Chamber has been instrumental in disseminating the information about the content, scope, and potential of the Framework Agreement on SAARC Preferential Trading Arrangement (SAPTA) among the business community in the region. For this purpose, it has organised, under its aegis, various National Seminars on SAPTA in the Member Countries. A Regional Seminar on SAPTA was also organised in Kathmandu in December 1994 by the Federation of Nepalese Chambers of Commerce and Industry in cooperation with the SAARC Chamber of Commerce and Industry and Friedrich-NaumannStiftung. SCCI delegations, headed by its President and comprising representatives of the National Federations of Chambers of Commerce and Industry of SAARC
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Member States, have visited Germany and Japan for expanding the exports from the SAARC region to the European Union and Japan. In view of expanding activities of the SCCI in the field of promoting trade both within and outside the SAARC region, SAARC has decided to continue its recognition to SCCI for a period of five years. The present President of SCCI is Mr. Salman F. Rahman, President of FBCCI, who was elected in October 1995. (iii) Saarclaw SAARCLAW - an Association for persons of the legal communities of the SAARC countries, established in 1991 with its headquarters in Colombo was recognised by SAARC as a regional apex body in July 1994. Established with the twin objectives of bringing together the legal communities within the region for closer cooperation and developing law as a source towards social change for development, SAARCLAW has been convening periodic conferences covering important areas of common interest to member countries. Since the establishment, SAARCLAW has held regional conferences in Colombo (1991), Karachi (February 1993), New Delhi (January 1994), and Kathmandu (April 1995). The fifth regional conference is to be held in Dhaka in January 1996. Since the Kathmandu conference, the parallel meeting of the Chief Justices of member countries would become a regular feature during the future conferences of SAARCLAW. In addition, SAARCLAW is engaged in (a) exchange of personnel (lawyers, Judges, Academics), (b) establishment of a SAARCLAW library in each country, (c) harmonisation of laws which offer mutual assistance within the judicial process, (d) publication of SAARCLAW magazine, and (e) establishment of a SAARC Arbitration Centre. SAARC REGIONAL INSTITUTIONS 1. SAARC Agricultural Information Centre (SAIC) SAIC, the first regional institution, was established in Dhaka in 1988. A Governing Board formulates policy matters, approves projects, recommends budget estimates, monitors and evaluates administrative and overall activities of SAIC. The SAIC Director is the Member-Secretary of the Board.

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SAIC serves as a central information institution having a network with relevant national information centres in each member state with a view to rapidly exchange regionally generated technical information and thereby strengthen agricultural research and development activities. SAIC has brought out several publications which contain information on various agricultural institutions in SAARC countries and current contents services on various subjects like fisheries, forestry, livestock, potato, rice etc. SAIC also publishes a quarterly newsletter. Some of the completed programmes are : Directory of Agricultural Institutions in SAARC Countries; Directory of Agricultural Scientists and Technologists of SAARC countries; Database on Fish Diseases in the SAARC Region; Database on Potato; Directory of Agricultural Periodicals of the SAARC Countries; Bibliography of Women in Agriculture in the SAARC Countries; Bibliography of Agroforestry in the SAARC Region. The on-going and future programmes of SAIC include: Selective Dissemination of Information (SDI); Preparation and Distribution of Selective Bibliographies; Acquisition of Books, Journals, Annual Reports etc. produced in the SAARC Countries; Directory of on-going Research Projects in SAARC member states; SAARC Agricultural Fact Book; Improved Farm Implements Currently used in the SAARC Countries; Procurement and Processing of Non-conventional Agricultural Information Materials; Abstracting and Indexing of Articles of Journals/ Newspapers and other Periodicals etc. 2. SAARC Tuberculosis Centre (STC) Located at Thimi, Bhaktapur (Nepal), STC became operational in mid-July 1992. The Centre's main objective is to work towards the prevention and control of tuberculosis in the SAARC region through a better coordination of efforts of the member states, especially their tuberculosis control programs. Institutional structure of the Centre consists of a Governing Board. A Director appointed to head the Centre is responsible for the implementation of the programmes and activities of the Centre. He is also the ex-officio Member-Secretary of the Board. Since its inception, STC has undertaken a number of initiatives for the prevention and control of tuberculosis in the region. It has undertaken a number of important training programs for the medical practitioners in the relevant areas and also organised several seminars. Some of its notable activities included seminars on surgical aspects of tuberculosis, socio-cultural aspects of tuberculosis, tuberculosis control programme through primary health care approach etc. The Centre has also organised a number of trainers training
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programs for tuberculosis in the region. Its other useful initiatives resulted in the compilation and printing of a SAARC list of TB hospitals, TB training institutes in the region, compilation of a similar list on TB and chest specialists in South Asia. The Centre is also actively engaged in collation and distribution of information on national tuberculosis control programs in SAARC countries, networking arrangements among member countries on tuberculosis related subjects as well as circulation of information on research activities in the region on tuberculosis. 3. SAARC Meteorological Research Centre (SMRC) The SMRC, established in Dhaka, was inaugurated on 2 January 1995. The Center will concentrate primarily on the research aspects of weather forecasting and monitoring rather than the operational aspects of the medium and long-range forecasting. The responsibilities of the Center would include undertaking research relevant to weather prediction and compiling climatological information. In addition to monitoring special weather phenomena, developing a networking system among the member states would also receive priority in its work. SMRC has a Governing Board, comprising a representative from each member state. Some of the important activities being undertaken by SMRC are collecting from national meteorological services of member states the available lists of up-todate climatological information for compilation; compiling a Directory of Meteorological Professionals and Technicians available in the National Meteorological Services of member states; publishing an annual newsletter regarding activities and programmes of the Center; and collecting required meteorological data from sources outside the region for its research programmes and to disseminate it to member states. 4. SAARC Documentation Center (SDC) SDC has been established at the Indian National Scientific Documentation Center (INSDOC) in New Delhi in May 1994. The SDC Director is responsible for the implementation of the programmes/activities of the Center and is also the Member Secretary of the SDC Governing Board which comprises a representative from each member state. The SAARC Documentation System (SDS) comprises the central facility i.e. SDC and its sub units in member states which would act as the Center's repositories, the SAARC Secretariat and SAARC Regional Institutions. In fulfilling the need for ready access to information, SDC will focus on documents generated in member states, those generated elsewhere in the
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SAARC region and access to international data bases in the areas of biological, physical, chemical, engineering, and life sciences as well as in developmental matters. REGIONAL CONVENTIONS/AGREEMENTS 1. Agreement on Establishing the SAARC Food Security Reserve (SFSR) During the Third SAARC Summit (Kathmandu, 1987), an Agreement on establishing the SAARC Food Security Reserve was signed. The Agreement, which came into force on 12 August 1988, provided for a reserve of foodgrains for meeting emergencies in member countries. The size of the reserve at present stands at 241,580 tonnes. The SAARC Food Security Reserve Board comprises representatives from each member country and meets once a year. The main functions of the Board are to undertake a periodic review and assessment of the food situation and prospects in the region including factors such as production, consumption, trade, prices, quality and stocks of foodgrains. 2. SAARC Regional Convention on Suppression of Terrorism The SAARC Regional Convention on Suppression of Terrorism was signed in Kathmandu in November 1987 during the Third SAARC Summit and came into force on 22 August 1988 following ratification by all member states. The Convention embodies and gives a regional focus to many of the wellestablished principles of international law in this respect. Under its provisions, member states are committee to extradite or prosecute alleged terrorists thus preventing them from enjoying safe heavens. Regional Cooperation is also envisaged in preventive action to combat terrorism. Exchange of information, intelligence and expertise are among the areas identified for mutual cooperation under the Convention. Cooperation among Liaison Officers (Anti Terrorist Law Enforcement Officers) is being developed through holding international meetings continually at regular intervals to monitor, update, evaluate and improve counter-terrorism strategies. The SAARC Terrorist Offences Monitoring Desk (STOMD) has been established in Colombo to collate, analyse and disseminate information about the terrorist incidence, tactics, strategies and methods. Efforts are being undertaken for further strengthening STOMD.

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The Eighth SAARC Summit, (New Delhi May 1995) expressed serious concern on the spread of terrorism in and outside the region and reiterated their unequivocal condemnation to acts, methods and practices of terrorism as criminal, It deplored all such acts for their ruinous impact on life, property, socio-economic development and political stability as well as on regional and international peace and cooperation. The Summit Leaders reiterated the need for a constant dialogue and interaction among the concerned agencies of member states. The Ministers sign the SAARC Regional Convention on Suppression of Terrorism in Kathmandu in November 1987. 3. SAARC Convention on Narcotic Drugs and Psychotropic Substances The SAARC Convention on Narcotic Drugs and Psychotropic Substances which was signed in Mal during the Fifth SAARC Summit in November 1990 came into force on 15 September 1993, following ratification by all member states. The Convention seeks to reinforce and supplement at the regional level, the relevant international conventions and promote regional cooperation among member states in both law enforcement and demand reduction.Incorporating the generally accepted principle of extradition or prosecution consistent with the respective national legislative regimes, the Convention envisages the widest measures for mutual legal assistance among member states in investigation, prosecution and judicial proceedings in respect of drug offences. The implementation of the Convention is monitored by the Technical Committee on Prevention of Drug Trafficking and Drug Abus, during its annual meetings. 4. Agreement on SAARC Preferential Trading Arrangement (SAPTA) The Agreement on SAPTA was signed by the Ministers of Member States on 11 April 1993 during the Seventh SAARC Summit. The initiative towards establishing SAPTA was taken during the Sixth SAARC Summit in Colombo in December 1991. This Agreement is an umbrella framework of rules providing for step-by-step liberalisation of intra-regional trade. It envisages periodic rounds of trade negotiations for exchange of trade concessions on tariff, para-tariff and non-tariff measures. SAPTA contains provisions giving Special and Favourable Treatment to the Least Developed Countries (LDCs) in SAARC region. Additional measures in favour of LDCs are incorporated in Annex-I of the Agreement. Provisions for safeguard action and balance of payments measures are also incorporated in the
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Agreement to protect the interest of Member States during critical economic circumstances. An Inter-Governmental Group (IGG) on Trade Liberalisation completed the first round of trade negotiations at its Sixth Meeting held at the SAARC Secretariat, Kathmandu on 20-21 April 1995. It finalised the Consolidated National Schedules of Concessions which were approved by the Fifteenth Session of the Council of Ministers held in New Delhi on 30 April - 1 May 1995. The SAPTA Agreement has since been ratified by Member States and will enter into force on 7th December 1995. The Committee of Participants has since been established and will meet in the third quarter of 1996 to review the progress in the implementation of the SAPTA Agreement. The Agreement on Preferential Trading Arrangement (SAPTA ) signed in Dhaka on 11 April 1993 has accelerated the process of trade and economic cooperation in the region. SAARC FUNDS South Asian Development Fund (SADF) In order to establish a South Asian Development Fund, initially a Panel of Experts was formed under the chairmanship of H.E. Lyonpo Dawa Tshering, the Foreign Minister of Bhutan. The Panel of Experts consisting of eminent persons from the SAARC Region held three meetings and the Chairman had exploratory consultations with the potential donors. Subsequently it was decided to establish an InterGovernmental Group (IGG) on South Asian Development Fund (SADF) to define the size, structure, resources and operational modalities of the proposed Fund and also to examine the relationship of the Fund with the SAARC Fund for Regional Projects including the possibility of their merger. A Consultant appointed by the Secretary-General submitted his Report which was considered by the IGG at its Second Meeting held at the SAARC Secretariat in October 1994. The Second Meeting of IGG, inter-alia, recommended that a three-window South Asian Development Fund (SADF) may be established with the merger of the SAARC Fund for Regional Projects (SFRP), the SAARC Regional Fund (SRF) and a third window for social development and infrastructure building. This recommendation has been since approved by the Fifteenth Session of the Council of Ministers (New Delhi, 1995). The Council approved the recommendation of the Standing Committee which included convening a meeting of the Group of Experts consisting of the Members of the Council of SAARC Fund for Regional Projects (CSFRP) and National Focal Points of
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Member States at the SAARC Secretariat, to finalise the terms of reference, operational modalities and composition of the Governing Board of the South Asian Development Fund (SADF). The Meeting of the Expert Group held at the SAARC Secretariat (September 1995) finalised the recommendations for consideration of the Sixteenth Session of the Council of Ministers. SAARC-Japan Special Fund SAARC-Japan Special Fund has been established, under which the Government of Japan has agreed to finance activities/programmes relating to SAARC region. Letters were exchanged between the Secretary-General and the Japanese Ambassador in Kathmandu on 27 September, 1993 confirming the acceptance of the Memorandum on the Guidelines for the Fund. The Fund established entirely with contribution of the Government of Japan consists of two components. The allocation under Component-I is to be used to finance selected programmes/activities identified and managed by the member states. Component-II would be for the programmes/activities identified and managed by the Government of Japan. SAARC Fund for Regional Projects (SFRP) The SFRP was established in 1991 to make available credit on easy terms for the identification and development of projects having a regional character. The Fund is managed by the Council for SAARC Fund for Regional Projects (CSFRP) comprising representatives of the Development Financing Institutions of SAARC member states. So far feasibility studies for thirteen projects have been undertaken which cover hydropower, sericulture, dairy products, medicinal cultivation and herbs etc. SAARC Regional Fund (SRF) The SRF aims at expediting the implementation of approved projects/programmes under IPA which remain unimplemented due to financial constraints. It would be administered by member states themselves. The sources of the Fund would be grants from donor countries, international agencies and organisations, and private sector donations. The projects/programmes that would qualify for funding are programme costs of SAARC Regional Institutions; costs of programme component of networking arrangements; development projects of scientific and technical in nature; projects/programmes involving high costs; long-term training programmes and projects/programmes of any other nature to be identified in future by member states. DESIGNATED SAARC YEARS
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Since 1989, it has been the practice to designate SAARC Years to focus on specific themes of common concern to member states. Plans of Action both at the regional and national levels were implemented in the following years : 1989 - SAARC Year for Combating Drug Abuse and Drug Trafficking 1990 1991 1992 1993 1994 SAARC SAARC SAARC SAARC SAARC Year Year Year Year Year of of of Disabled the of of Girl-Child Shelter Environment Persons Youth

1995 SAARC Year of Poverty Eradication - In addition, 1991-2000 A.D. has been designated as the "SAARC Decade of the Girl-Child" and 1996 as the SAARC Year of Literacy. COOPERATION WITH ORGANISATIONS 1. UNCTAD SAARC-UNCTAD Memorandum of Understanding on the Trade Analysis and Information System (TRAINS) was signed in February 1993. The global aim of TRAINS is to increase transparency in international trading conditions and thus facilitate trade. This was the first Agreement of cooperation to be signed by SAARC with an international organisation. Under this Agreement, UNCTAD provides the SAARC Secretariat, on a regular basis, an updated copy of TRAINS CD-ROM containing latest data on trade control measures prevailing in developed and developing countries. The SAARC Secretariat in turn updates trade control measures prevailing in the SAARC member states on a regular basis and forwards the same to UNCTAD Secretariat, on computer floppies for incorporation in the updated versions of TRAINS CD-ROM. SAARC Secretariat has now data on trade control measures prevailing in 50 countries including most of the SAARC member countries. The target of UNCTAD is to include latest trade control measures of 100 countries of the world in this PC-based information system. This information is available to SAARC member states on request. 2. ESCAP INTERNATIONAL AND REGIONAL

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A Framework Agreement for cooperation between SAARC and ESCAP was signed in February 1994. The Agreement provides for cooperation on development issues through joint studies, workshops and seminars and exchange of information and documentation in poverty alleviation, human resource development, trade promotion, foreign direct investment, environmental protection and prevention of drug trafficking, infrastructure development etc. SAARC Secretary-General has attended two Consultative Meetings of the Executive Heads of Subregional Organizations in Asia and the Pacific and ESCAP (Bangkok 1994 and Jakarta 195). The Secretary-General also participated in the Meeting of Eminent Persons on Human Resources Development organised by ESCAP Secretariat in Bangkok (November 1994). 3. UNICEF A Cooperation Agreement between SAARC and UNICEF, was signed on 10 December 1993. The Agreement envisages cooperation in implementing the relevant SAARC decisions relating to Children through an annual agenda which include joint studies, exchange of documentation and monitoring of implementation. In pursuance of the Cooperation Agreement, the SAARC Secretariat and the UNICEF Regional Office for South Asia have been holding regular consultations, which have covered progress in the implementation of Summit directives on Children and the recommendations of the Council of Ministers, Standing Committee and the relevant Technical Committees. The consultations focus on all child related issues including the Annual Review of the Situation of Children in the SAARC Countries; implementation of the Colombo Resolution on Children; Plan of Action to mark 1991-2000 A.D. as the SAARC Decade of the Girl Child; the serious threat faced by Girl Children in Especially Difficult Circumstances (GCEDC); mid-decade goals on Children emanating from the World Summit for Children (1990) and certain aspects of the United Nations Convention on the Rights of the Child. The regular interaction between SAARC and UNICEF has facilitated better understanding of problems faced by Children in South Asia and regional policies and strategies to meet these challenges. 4. APT A Memorandum of Understanding (MOU) was signed by SAARC SecretaryGeneral and Executive Director of Asia Pacific Telecommunity (APT) on February 4 1994. The MOU envisages cooperation between the two organisations to promote the growth of telecommunications in order to accelerate economic and social development in the region. SAARC and APT
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will exchange information, publications and documents on their respective activities in this field. They will also exchange technical and operational details of plans for improvement of national, regional and international telecommunications network. Collaboration is also envisaged in planning and development of networks, transfer of technology, promoting international standards, development of human resources and application of telecommunications in sectors such as health, education, environment, transport, and tourism. 5. UNDP A Memorandum of Understanding (MOU) between SAARC and UNDP was signed by the SAARC Secretary-General and Administrator of UNDP in July 1995. The MOU embodies a general agreement for broad-based collaboration with the aims and purposes of promoting sustainable human development for attaining poverty elimination, preservation and protection of environment, regeneration of natural resources, employment creation, and the goals of women in development; undertakes periodic consultation for joint activities; publishing studies on priority concerns and exchanging relevant reports. 6. UNDCP SAARC Secretary-General and United Nations International Drug Control Programme (UNDCP) Executive Director signed an MOU on 18 August 1995 to coordinate their efforts in combating drug trafficking and drug abuse in the region. The Memorandum envisages mutual consultation and exchange of information between the two organisations. In addition, the two organisations have agreed to seek each other's technical cooperation in pursuing their respective drug control activities in areas of drug supply and demand reduction to assist in the development and implementation of such activities as human resource development; improving regional cooperation on drug intelligence through the SAARC Drug Offences Monitoring Desk; legislation; financial investigation; money laundering; precursor control; the establishment of a networking arrangement among existing institutions in drug abuse prevention etc. 8. COLOMBO PLAN SAARC has also entered into cooperation arrangement with the Colombo Plan Bureau for promotion on the Role of SAARC NGOs in anti-narcotic activities. In this context, representative of NGOs from seven countries attended a meeting of the SAARC Forum on the role of NGOs in Drug Demand Reducation in Dhaka on 10-13 April 1995.
39

Efforts are also underway to establish a working relationship between the SAARC Secretariat and the Colombo Plan Bureau on training facilities in the region.

8. ITU The Memorandum of Understanding (MOU) between SAARC and International Telecommunications Union (ITU) has been finalised and is to be signed shortly. For more information asia.com/saarc/ visit SAARC's home page: http://www.south-

The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations , which was established on 8 December 1985 when the government of Bangladesh , Bhutan , India , Maldives , Nepal , Pakistan , and Sri Lanka formally adopted its charter providing for the promotion of economic and social progress , cultural development within the South Asia region and also for friendship and cooperation with other developing countries. It is dedicated to economic , technological , social , and cultural development emphasising collective self-reliance. Its seven founding members are Sri Lanka , Bhutan , India , Maldives , Nepal , Pakistan , and Bangladesh . Afghanistan joined the organization in 2007 . Meetings of heads of state are usually scheduled annually ; meetings of foreign secretaries , twice annually . It is headquartered in Kathmandu , Nepal.

40

Contents

1 History 2 Objectives 3 Principles o 3.1 Secretariat o 3.2 Regional Centres o 3.3 Political issues o 3.4 South Asian Free Trade Area 4 SAARC Youth Award 5 Members of SAARC o 5.1 Current members o 5.2 Observers o 5.3 Others 6 Secretaries-General of SAARC 7 SAARC summits 8 See also 9 References 10 External links

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History The first concrete proposal for establishing a framework for regional cooperation in South Asia was made by the late president of Bangladesh, Ziaur Rahman, on May 2, 1980. Prior to this, the idea of regional cooperation in South Asia was discussed in at least three conferences: the Asian Relations Conference in New Delhi in April 1947, the Baguio Conference in the Philippines in May 1950, and the Colombo Powers Conference in April 1954. In the late 1970s, SAARC nations agreed upon the creation of a trade bloc consisting of South Asian countries. The idea of regional cooperation in South Asia was again mooted in May 1980. The foreign secretaries of the seven countries met for the first time in Colombo in April 1981 . The Committee of the Whole, which met in Colombo in August 1985, identified five broad areas for regional cooperation. New areas of cooperation were added in the following years.

42

Objectives The objectives of the Association as defined in the Charter are:

to promote the welfare of the people of South Asia and to improve their quality of life;

to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential;

to promote and strengthen selective self-reliance among the countries of South Asia;

to contribute to mutual trust, understanding and appreciation of one anothers problems;

to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields;

to strengthen cooperation with other developing countries; to strengthen cooperation among themselves in international forums on matters of common interest; and

to cooperate with international and regional organisations with similar aims and purposes.

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Principles The principles are:

Respect for sovereignty, territorial integrity, political equality and independence of all members states

Non-interference in the internal matters is one of its objectives

Cooperation for mutual benefit All decisions to be taken unanimously and need a quorum eight members of all

All bilateral issues to be kept aside and only multilateral ( involving many countries ) issues to be discussed without being prejudiced by bilateral issues

Afghanistan was added to the regional grouping on 13 November 2005 , [3] With the addition of Afghanistan , the total number of member states were raised to eight (8). In Apri l 2006 , the United States of America and South Korea made formal requests to be granted observer status. The European Union has also indicated interest in being given observer status , and made a formal request for the same to the SAARC Council of Ministers meeting in July 2006 . [4][5] On 2 August 2006 the foreign ministers of the SAARC countries agreed in principle to grant observer status to the US , South Korea and the European Union . [5] On 4 March 2008 , Iran requested observer status . [6] Followed shortly by the entrance of Mauritius.

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Secretariat. The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated by Late King Birendra Bir Bikram Shah of Nepal. It is headed by a Secretary General appointed by the Council of Ministers from Member Countries in alphabetical order for a three-year term . He is assisted by the Professional and the General Services Staff , and also an appropriate number of functional units called Divisions assigned to Directors on deputation from Member States. The Secretariat coordinates and monitors implementation of activities , prepares for and services meetings , and serves as a channel of communication between the Association and its Member States as well as other regional organizations . The Memorandum of Understanding on the establishment of the Secretariat which was signed by Foreign Ministers of member countries on 17 November 1986 at Bangalore , India contains various clauses concerning the role , structure and administration of the SAARC Secretariat as well as the powers of the Secretary-General . In several recent meetings the heads of state or government of member states of SAARC have taken some important decisions and bold initiatives to strengthen the organisation and to widen and deepen regional cooperation. The SAARC Secretariat and Member States observe 8 as the SAARC Charter Day1 . Regional Centre The SAARC Secretariat has established various regional centres in member states . The 14th being SAARC Arbitration Council established at Islamabad in 2010 . Each regional centre is managed by a governing board . The GB has representatives of each of the member state and SAARC Secretariat. Political issues SAARC has Intentionally laid more stress on " core issues " mentioned above rather than more divisive political issues like the Kashmir dispute and the Sri Lankan civil war . However , political dialogue is often conducted on the margins of SAARC meetings. SAARC
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has also refrained from interfering in the internal matters of its member state s. During the 12th and 13 th SAARC summits , extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism. South Asian Free Trade Area Over the years , the SAARC members have expressed their unwillingness on signing a free trade agreement . Though India has several trade pacts with Maldives , Nepal , Bhutan and Sri Lanka , similar trade agreements with Pakistan and Bangladesh have been stalled due to political and economic concerns on both sides. In 1993 , SAARC countries signed an agreement to gradually lower tariffs within the region , in Dhaka. Eleven years later , at the 12th SAARC Summit at Islamabad , SAARC countries devised the South Asia Free Trade Agreement which created a framework for the establishment of a free trade area covering 1. 6 billion people . This agreement went into force on January 1 , 2006 . Under this agreement , SAARC members will bring their duties down to 20 per cent by 2009. SAARC Youth Award The SAAC Youth Award is awarded to outstanding individuals from the SAARC region. The award is otable due to the recognition it gives to the Award winner in the SAARC region. The award I sbased on specific themes which apply to each year . The award recognises and promotes the commitment and talent of the youth who give back to the world at large through various initiatives such as Invention s, Protection of the Environment and Disaster relief . The recipients who receive this award are ones who have dedicated their lives to their individual causes to improve situations in their own countries as well as paving a path for the SAARC region to follow . The Committee for the SAARC Youth Award selects the best candidate based on his/her merits and their decision is final. Previous Winners:

1997 : Outstanding Social Service in Community Welfare - Mr . Md. Sukur Salek ( Bangladesh ) 1998 : New Inventions and Discoveries - Dr . Najmul Hasnain Shah ( Pakistan ) 2001 : Creative Photography : South Asian Diversity - Mr . Mushfiqul Alam ( Bangladesh ) 2002 : Outstanding contribution to protect the Environment - Dr . Masil Khan ( Pakistan )
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2003 : Invention in the Field of Traditional Medicine - Mr . Hassan Sher ( Pakistan ) 2004 : Outstanding contribution to raising awareness for TB and/or HIV / AIDS - Mr. Ajij Prasad Poudyal ( Nepal ) 2006 : Promotion of Tourism in South Asia - Mr. Syed Zafar Abbas Naqvi ( Pakistan ) 2008 : Protecting the Environment in South Asia - Ms . Uswatta Liyanage Deepani Jayantha ( Sri Lanka ) 2009 : Outstanding contribution to humanitarian works in the aftermath of Natural Disasters - Dr . Ravikant Singh ( India ) 2010 : Outstanding contribution for the Protection of Environment and mitigation of Climate Change - Ms . Anoka Primrose Abeyrathne ( Sri Lanka )

Members of SAARC Current members

Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

Observers

Australia[8] China European Union[9]

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Japan [9] Iran Mauritius[10] Myanmar South Korea United States

Others

South Africa has participated in meetings . [

11]

Secretaries - General of SAARC Abul Ahsan Ibrahim Hussain Zaki Yadav Kant Silwal Naeem U . Hasan Nihal Rodrigo Q . A . M . A . Rahim Lyonpo Chenkyab Dorji Sheel Kant Sharma January 16 , 1987 to 15 October 1989 January 1, 1992 to December 3 1, 1993 January 1, 1994 to December 31 , 1995 January 1 , 1996 to December 31 , 1998 January 1 , 1999 to January 10 , 2002 January 11 , 2002 to February 28 , 2005 March 1 , 2005 to February 29 , 2008 March 1 , 2008 to February 28 , 2011

Fathimath Dhiyana Saeed March 1, 2011 to March , 2012 SAARC summits

No

Date

Country
48

Host

Host leader

1st

7 December 1985

8 Bangladesh Dhaka Ataur Rahman Khan

2nd

16 17 November 1986 2 November 1987 4

India

Bangalore

Rajiv Gandhi

3rd

Nepal

Kathmandu

Marich Man Singh Shrestha

4th

29 31 December 1988 21 23 November 1990 21 December 1991 10 - 11 April 1993 2 4 May 1995 12 14 May 1997 29 31 July 1998 4 6 January 2002 2 6 January

Pakistan

Islamabad

Benazir Bhutto

5th

Maldives Sri Lanka

Mal

Maumoon Gayoom Dingiri Wijetunge Khaleda Zia

Abdul

6th

Colombo

Banda

7th

Bangladesh India

Dhaka

8th

New Delhi

P. V. Narasimha Rao Maumoon Gayoom Abdul

9th

Maldives Sri Lanka Nepal Pakistan

49

Mal

10th

Colombo

Sirimavo Ratwatte Dias Bandaranaike Sher Bahadur Deuba Zafarullah Khan

11th 12th

Kathmandu Islamabad

2004 12 13 November 2005 3 4 April 2007 1 3 August 2008 28 29 April 2010 10 -11 November 2011[12] 2013
[13]

Jamali

13th

Bangladesh

Dhaka

Khaleda Zia

14th

India Sri Lanka Bhutan

New Delhi

Manmohan Singh Ratnasiri Wickremanayake Jigme Thinley

15th

Colombo

16th

Thimphu

17th

Maldives

Addu

Mohamed Nasheed

18th

Nepal

Kathmandu

Baburam Bhattarai

See also SAA C portal

Asia Cooperation Dialogue Asia Pacific Research and Training Network on Trade Asia - Pacific Trade Agreements Database Asian Clearing Union List of SAARC summits SAARC Consortium on Open and Distance Learning BIMSTEC

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Mekong - Ganga Cooperation South Asian Economic Union South Asia Free Trade Agreement South Asian Football Federation Indian Ocean Rim Association for Regional Cooperation South Asian Federation of Accountants

51

IMPACT EXTERNAL DETERMINANTS PROJECTIONS: SAARC AND PAKISTAN OF GROWTH AND GROWTH

World is increasingly being divided into regions. The regional trading blocks are becoming more and more deepened and widened around the globe. The European Union (EU) has already reached a stage approximating to the trading relations usually found within a country rather than between the countries. The existence of regional economic groups, particularly in European and American continents, pose a range of theoretical, empirical and organizational questions for developing countries like Pakistan who depend on the countries of these regions for a significantly high share of their international trade. This paper focuses on the prospects of extended economic cooperation of Pakistan with the member countries of the South Asian Association for Regional Cooperation (SAARC).1 The argument is structured around three parts. Part I reviews the theoretical rationale of regional economic cooperation and the recent developments shaping the trading relations within the cooperating blocs. Part II critically evaluates the relative size and significance of the external sector of the SAARC region countries, along with presenting statistical estimates of the major external determinants of the regions economic growth. Finally, Part III estimates the relationship of major directions of Pakistans exports with the economic growth of the country and presents the growth projections by increasing and diverting the exports to the SAARC and ASEAN region countries.

A region combines internal liberalization and external defining or strengthening of a unit within the multilateral system, and is therefore very different from either single-country or multilateral liberalization [Page 2000]. The benefits of multilateral trade under aregulatory system, which ensure that liberalization is implemented and maintained, are well supported in economic theory. During the Uruguay Round, however, the question was raised of whether regionalization was or should be an alternative to global free trade and the concern continues to develop ever after the Rounds successful conclusion.

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2) The basic analysis of the effects of regional cooperation on the member countries and the rest of the world dates from Viner ( 1950). By liberalizing trade among themselves, countries are able to substitute for home production by importing goods produced at:1) The SAARC countries include Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. It may also be argued that the initial failures and subsequent difficulties which lengthened the Uruguay Round of trade talks itself encouraged regions as alternative approaches to lowering trade barriers. Furthermore, the countries in the effectively operational regional groups are better able to secure their

2)

objectives at WTO forums. lower cost in other members. This increases both production and consumption and creates trade. Income is increased by the availability of the lower cost goods, and production is shifted from the less to the more efficient location. If, however, one country imported previously from a non-member country, but the removal of tariffs on imports from fellow members means that imports from them are now cheaper to the purchaser, then trade will be diverted from the more efficient outside supplier to the less efficient one within the group. The country looses: although there is a consumption gain from the cheaper imports, it does not receive the tariff revenue, while the production is shifted from a more efficient to a less efficient location. The trade-creating or diverting effects may appear instead as investment-creating or diverting, if investment moves to take account of new market and cost structures. However, a variety of non-economic motives are also behind the regional integration agreements.3 Indeed, the argument that trading binds countries together and therefore increases security dates at least from Adam Smiths view that commerce promoted peace. Therefore, if along with improving welfare through trade, the objectives of the region also include other development or strategic purposes, and if other countries/regions also have nontrade objectives, then diversion and creation must be extended to non-economic results. Finally, for countries to join together to form a region, it is normally assumed that all must gain relative to not joining. Although the traditional analysis of trade creation and diversion is based on a view of the world in which inter-country trade is driven entirely by differences in productivity and in factor endowments, trade can also arise from product differentiation and economies of scale, which reduce costs as production grows. Then import
53

barriers become even more costly because competition between firms is weakened and consumers lose from the resulting decreases in output and increases in price. International trade offers an important means of increasing competition by allowing new suppliers to enter markets.

1)The regional blocs, by fostering trade between members, can generate such benefits because of the combination of larger firm size (which increases economies of scale) and a larger number of firms (which increases competition). When several national markets are merged, the number of producers in each country may fall, while the number of sellers with reasonable access to each market rises because producers from partner countries now have access. These so-called pro-competitive effects appear to have operated strongly during the last quarter of the 20th century, resulting in an unprecedented move toward regionalism. These developments have occurred against the backdrop of globalization: new technologies and more liberal trading regimes have led to higher trade volumes, larger investment flows, and increasingly footloose production. Presently, almost all countries are members of a bloc, and many belong to more than one. More recently, there has been a surge of regional trade agreements (RTAs): about 162 RTAs 3 These are witnessed by the agreements where gain from trade seem very small, or where some countries actually receive payments to compensate for trade losses. If trade were the sole motive, the only reason for compensating payments to be made would be if some countries actually lost, or gained much less, but needed to be included to provide gains to others. Formal compensation payments are included in very few agreements, but they are rarely based on trade [see, Page 2000]. 4 Measuring the quantifiable trade and investment effects nevertheless remains a useful check on the economic costs of other objectives to members and gives part of the effects of regions on third parties. are in force as of 2002 with over half of those coming into existence after 1995. The World Trade Organization (WTO) estimates that over 300 will be in effect by 2007. 5 At their simplest, these agreements merely remove tariffs on intra-bloc trade in goods, but many go beyond that to cover non-tariff barriers and to extend liberalization to investment and other policies. At their deepest, the regional blocs have the goal of economic union and involve the construction of shared executive, judicial, and legislative institutions. Such deep integration was first actively pursued in the Single Market Program of EU, but its elements are now finding their way into the debate on other regional agreements.
54

6Finally, there are no rules for policy toward regionalism that are both universal and operationalthe universal rules are so broad as to be non-operational, and the operational rules are too specific to be universal. Regionalism still remains a very fertile area for research. Although the existing literature is huge, there is no consistency in the methodologies and intellectual bases of the research or in its conclusions. Indeed, the world of multiple trading blocs is still too new to permit a definitive empirical answer. The authors approach in the following is also a very limited one. The major concern is the importance of the external sector in the economic growth of the SAARC region countries and the significance of intra-region trade in the economic growth of Pakistan. II. The SAARC region, home to nearly a fifth of humanity, is endowed with vast natural and human resources. It has the potential of becoming a vibrant region in the world, given its enormous resources in manpower, technology, agricultural and mineral assets, its history and civilization, arts and culture.7 The authors believe that extended economic and cultural intra-regional exchanges within the framework of SAARC can realize much of this potential. But, unfortunately, not only that the member countries have so far failed to make a concrete move toward that end, the regions share in international trade as a whole is also not commensurate with its headcount size in the world market. Furthermore, the relative share of the intra-region trade of the SAARC countries remains regrettably low in their total international merchandize exchange. The figures listed in Table 1 provide a vivid picture of the regions relative share in international trade. 5 See, Proliferation of regional trade agreements - Implications for multilateral regime, WTO Website: http://www.wto.org/english/tratop_e/region_e/regfac_e.htm 6 For example, In the Americas the CanadaUnited States Free Trade Agreement of 1988 was extended to Mexico in 1994 through North American Free Trade Area (NAFTA); Common Market of the South (Mercado Comn del SurMERCOSUR) was formed in 1991 and the Group of Three (G3) in 1995; and the Andean Pact and the Central American Common Market (CACM) were resurrected in 1991 and 1993, respectively. In 1992 the countries of the Association of Southeast Asian Nations (ASEAN), after 25 years of political cooperation with limited trade cooperation, formed a meaningful FTA, the ASEAN Free Trade Area (AFTA). Since then, additional countries have joined AFTA, which has also started talks with China.
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7 The SAARC regions promise is supported by a historical finding which shows that in AD 1000, Asia, except Japan, accounted for more than two thirds of the world GDP based on the strength of the Chinese and Indian civilizations (see, Madison 2000). 4 Table: 1 International Trade and Investment Flows: SAARC (1990-2002) Category Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002. 1. International Trade (% of the value of world trade) 1a. Share in exports 0.79 0.78 0.82 0.89 0.90 0.90 0.94 0.95 0.94 0.95 0.99 1.03 1.08 1b. Share in imports 1.12 1.03 1.09 1.09 1.08 1.15 1.19 1.18 1.21 1.21 1.26 1.22 1.28 1c. Share in trade gap (deficit) 0. 33 0.25 0.27 0.20 0.18 0.25 0.25 0.23 0.27 0.26 0.27 0.19 0.20

2. Share of Intra-region Trade (% share in 1a. & 1b.) 2a. Intra-region exports 3.13 3.59 3.88 3.54 3.71 4.38 4.30 4.10 4.80 4.10 4.20 4.50 4.30 2b. Intra-region imports 1.91 2.48 2.99 3.07 3.25 3.82 4.40 3.70 4.60 3.60 3.40 4.00 3.90 Year 1991-1996 1997 1998 1999 2000 2001 2002

3. Foreign Direct Investment (FDI) (% of gross fixed capital formation) 3a. World 4.4 7.5 10.9 16.5 20.8 12.8 12.2 3b. Developing countries 6.5 11.4 12 14.3 14.6 12.7 10.5 3c. Asia 6.1 9.7 10.2 10.7 13.1 9.8 7.2 3d. SAARC 2.1 4.4 2.7 2.6 2.3 2.3 3.7 Source: (category 1 & 2) IMF, Direction of Trade Statistics Yearbook; (category 3), RIS 2004, Table 5.2, P. 40. Average FDI flows in SARRC region countries, excluding Maldives.

5 1990 to 2002, and the relative size of its foreign direct investment flows (FDI), from 1991 to 2002. Table 1 also lists the share of intra-region trade in SAARC countries total exports and imports. The figures show that the region as a whole could only manage below one percent share in world exports in eleven years to 2000, except for the marginal increase over one percent listed for the last two years of the period. The regions share in world imports also shows a consistent trend of a little over one percent throughout the period
56

reported in Table 1. The relative size of regions exports and imports share in world trade provides the estimate of its share in the world trade gap which shows a persistent deficit ranging between 18-33 percent, with most of the figures falling in the upper range. The SAARC region is a global partner in merchandize transactions as well as in the flows of foreign investment, and the global trends and prospects affect its member countries also through growing integration of capital markets. 8 The figures listed in Table 1 show that the relative size of FDI flows to the SARRC region is much smaller compared to Asia and developing countries where these flows contributed 10 to 15 of total gross fixed investment. Moreover, the quality of FDI inflows is more important than their magnitude because all kind of FDI flows do not benefit the host country in a similar manner [Kumar 2002]. Export orientation of the FDI inflows could be in particular an indicator of the quality, especially for developing parts of the world. In the SAARC region, FDI plays a marginal role in the countries export sector [RIS 2004]. At the outset, the trade share figures listed in Table 1 appear to suggest that the SAARC region may not be excessively dependent on international trade. Unfortunately, such a suggestion is contradicted by the figures listed in Table 2, which show that the share of trade in the GDP of the seven member countries ranged between 14-169 percent at different times in 17 years to 2001. Indias share is relatively the lowest throughout the period, but still ranges between 14-30 percent of GDP. The smaller countries, particularly Bhutan and Maldives, are the most vulnerable since they appear to have unsustainably higher share of trade in the GDP.9 Furthermore, and perhaps most importantly, the SAARC regions exports are widely perceived to lack dynamism in terms of their skill and technological content [Mayer and Wood 2000; Lall 2000]. The low skill and technology intensive goods are not only low value adding compared to knowledge intensive goods but are also slow moving because of increasing price competition [Lall 1999; Sinha R. S. 2001]. The figures listed in Table 2 also provide the evidence that, though excessively dependent on the external sector, the SAARC region countries have not performed very well even in terms of their global market share in basic manufactures. Except India, who ranks 34, other countries rank 8 See, RIS 2001/02 for evidence on growing synchronization of the regions stock markets with the global financial centers. 9 The substantial fall in the share of Maldives exports, as a result of graduation of the country from Least Developed Countries (LDC) status, to the preferential EU market, from 21 percent in 1997 to 12
57

percent in 2001, is a case in point. The Maldives would lose the entire margin on fish exports following graduation (see, WTO), 2003.\ 6 Table: 2 Proportion of Trade in GDP and Trade Performance Index: SAARC Countries Category Country Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka 1. Proportion of Trade (% of GDP) 1985-87 24.26 61.52 14.08 60.26 31.91 34.01 61.87 1990-92 19.83 75.05 18.78 88.51 36.28 37.45 68.42 1996-98 30.47 76.15 25.45 167.08 59.59 36.40 79.17 2000-01 35.50 89.47 29.79 168.94 55.06 35.84 85.42 2. Trade Performance Index (Basic manufactures) Relative ranking among 184 countries 122 124 129 - - 124 129 Trend of exports 18 123 53 - 70 26 105 Average annual change in per capita exports 105 121 80 - 25 54 99 Share in world market 83 119 34 - 121 95 93 Product diversification 81 123 24 - 90 81 94 Product spread (concentration) 71 124 19 - 103 86 81 Market diversification 53 122 32 - 44 62 71 Market spread (concentration 62 122 14 - 88 45 74 Source: RIS 2004, (category 1) Table 2.1, P.19; (category 2) Table 4.6, P. 33. In category 2, data year for Bangladesh, India and Sri Lanka is 1997-2001, while the data year for Bhutan, Nepal and Pakistan 1995-1999. Refers to the year 2000 and year 1990 figure for Bhutan and Maldives respectively. falls in the range of 83-121. However, almost all countries, except Bhutan, perform relatively better in terms of market diversification, while product diversification rank is generally quite low. Indeed, product diversification and differences in product quality are very often associated with differences in workers skill. In this context, the model developed by Kremer (1993) has very important implications for both economic development and labor markets. 10 Finally, given the generally very high share of trade in their GDP, the member countries of SAARC are already excessively vulnerable to external shocks. The situation warrants that the regions countries pay greater attention to increasing the size of their economies, rather than simply emphasizing the sheer increase in exports. A reasonably high and sustainable rate of growth of the member countries will not only provide the resilience for absorbing the external shocks, it will also help increase their share in international trade and investment flows. This argument is carried into the Part III of the study, through some findings made in this part on the major external sources of growth in the SAARC region countries. These findings are discussed
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below. Table 3 lists the coefficients of relationships estimated within a system of two simultaneous equations,11 utilizing the pooled data for the period from 1972-2001. The initial formulation of the system included a much larger number of instruments, many of which had to be dropped due to the inaccessibility of sufficient data for the countries included in the model. The estimated model takes the following specific form in its analytical formulation: EGit= +1DIit+2 XEit+3PLit+ 4ERit+5TBit+uit .1 DIit=+1EGit+2XEit+3PLit+4ERit+5TBit+6DCit+uit 2

Where,

EG= Economic growth (growth rate of GDP) DI= Domestic investment (growth rate of gross capital formation) XE= Export earnings (growth rate) PL= Price level (growth rate of Consumer Price Index [CPI]) ER= Exchange rate (growth rate of domestic currencys price in terms of US$) TB= Trade balance (growth rate) DC= Domestic credit (growth rate) U= Stochastic error term 10 In this model, Kremer applies O-ring metaphor to his development theory which explains the differences in income between developed and developing countries. An O-ring is a donut shaped rubber seal. The implications of this theory are very important since they seem to contradict a great deal of conventional wisdom, especially the assertions of the theory of comparative advantage (see, Kremer 1993). 11 The authors could not access the data for Bhutan and Maldives on the variables included in the model.8 The values for all variables have been taken from International Financial Statistics (IFS), published by the International Monetary Fund (IMF). All values have been transformed into constant terms for calculating the real growth rate of the variables. Two Stage Least Square (2SLS) technique is applied on E-view package for statistical estimation of the model. The results reported in Table 3 show that two of the three external sector variables, XEit and TBit, turn out to be significant in Equation 1, indicating that external sector is having important influences on growth in the SAARC region countries. The coefficient of export earnings, XEit, is significant at 10 percent level and shows that one percent increase in export earnings increases the
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growth rate of GDP by .04 percent, meaning that a doubling of the current export earnings in the countries of the region will increase, on average, the GDP growth rate of the countries by 4 percent. Given the large share of international trade in the SAARC countries GDP, this result is quite expected. The other significant external sector variable is trade balance, TBit, and it carries a large coefficient which is significant at 5 percent level. It shows that one percent decrease in trade imbalance increases the GDP by 4.85 percent. All countries in the SAARC region have been experiencing persistent trade balance deficits and the result provides sufficient ground to work on reducing the gap between export receipts and import payments. The coefficient of the third external sector variable, exchange rate, ERit, carries a negative sign, implying that appreciation of the domestic currency is not conducive for the economic growth of the SAARC region countries. However, this result is not valid. Table:3 External Determinants of Growth: SAARC (1972-2001) Estimated Coefficients Equation 1 Equation 2 Dependent variable= EGit Observations= 112 Dependent variable=DIit Observations= 112 Variable Coefficient t-Statistics Variable Coefficient t-Statistics Constant 3.166*** 2.805 Constant -5.553 -1.517 DIit 0.368*** 4.308 EGit 1.959*** 4.377 XEit 0.042* 1.699 PLit 0.080 0.415 PLit -0.026 -0.336 ERit -0.103 -0.731 ERit -0.008 -0.124 TBit 9.669* 1.779 TBit -4.848** -2.231 DCit 0.153 1.356 AR(I) -0.394*** -3.884 AR(I) -0.387*** -4.349 R2= 0.286 Adjusted R2= 0.245 D.W.= 1.964 D.H.= 0.496 R2= 0.363 Adjusted R2= 0.326 D.W.= 1.968 D.H.= 0.496 *** Significant at 1% level **Significant at 5% level * Significant at 10% level9because the estimated coefficient is insignificant. Of the two internal sector variables, domestic investment and price level, the former, DIit,turns out to be significant at one percent. It is a theoretically valid result. The negative sign of the estimated coefficient of price level, PLit, implies that inflation hurts the growth of GDP, but the result is not significant, hence again invalid. Finally, the size of the adjusted R square for estimated equation 1 is only 0.25, showing that 25 percent of the variation in the GDP growth rate of SAARC region countries is explained by the explanatory variables included in the model. Although this appears to be a weak fit, it is usually accepted within a system. The results reported for estimated Equation 2
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again endorse the theoretically valid positive relationship between economic growth and investment. The coefficient of the growth variable, EGit, is significant at one percent level, showing that one percent increase in growth rate increases domestic investment by about 2 percent. A positive and significant relationship is also observed between the domestic investment and the deficit in the balance of payments. The coefficient of the trade balance variable, TBit, is significant at 5% level and shows that one percent increase in balance of trade deficit increases the domestic investment by about 10 percent. Apparently, this result is not compatible with the findings in Equation 1 which show that deficit in trade balance decreases growth, while the latter is positively and significantly related with domestic investment. However, the overall inference is theoretically valid, particularly in the context of the dependency created by the persistent deficit in the trade balance which may negatively affect the investment efficiency. The other variables, PLit, ERit and DCit, included in Equation 2 turn out to be insignificant. The size of the adjusted R square for estimated equation 2 is greater than the growth equation, showing that 33 percent of the variation in the growth rate of the domestic investment of SAARC region countries is explained by the right hand side variables in the analytical formulation. Finally, the estimated model was checked for misspecifications, autocorrelation was detected and removed by applying autoregressive scheme one to the both equations in the system. III. Pakistan after India is the second largest country in the SAARC region and it is constantly making progress in unilaterally liberalizing her trade regime. The external sector reform measures of the 1990s are also continuing in the new millennium [see, RIS 2002]. However, it is important to note that majority of the liberalization measures of Pakistan are part of the IMF/World Bank Policy framework paper of December 1998. 12 The country, for example, is currently required to implement key sector reforms as part of the conditionality of Poverty Reduction and Growth Facility (PRGF). 13Indeed, since 1988, Pakistan has been required to correct her macroeconomic imbalances under the terms imposed by the Structural Adjustment Programs (SAPs) of the international12 See, http:/www.ustr.gov/reports/nte/2003/Pakistan.pdf 13 In December 2001, IMF approved a three year agreement of about $1.32 million for Pakistan, under the PRGF (See, RIS 2004). 10 funding agencies. Findings made by a number of studies suggest that SAPs were accompanied with rising income inequality and poverty in the country [See, Kemal 1994; Jaffery and Khattak 1995; and Anwar 1996]. The analysis presented below is
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based on the premise that Pakistan needs to adopt alternative growth strategies which ought to help improve the welfare of the masses. Any such strategy requires both higher growth rate, which is sustainable in the long-run, and the freedom to maneuver the public policy toward optimal targets. The authors believe that for Pakistan, extended economic cooperation with the SAARC region is the most viable strategy compared to any other alternative. In this case, the region might even tend to be trade creating, through increased production competition between the members, not diverting, because the countries will not be significantly changing the import direction, at least in the early stages of integration. However, an analysis of the trade effects would require data on: each countrys imports and exports from the region and from the rest of the world; the composition and direction of each countrys unrecorded border trade; 14 actual cost estimates for present and potential production of different product categories in each country; and Information on each countrys demand and supply elasticities of major tradables. Unfortunately, except for the direction of trade, hardly any effort has been made so far to generate the data for the SARRC region on the variables listed above. Therefore, it is not possible to formulate the trade and production models providing the estimates of even immediate static effects. The authors have made a limited effort in the following by estimating and projecting the growth impact of the major destinations of Pakistans exports. The analysis is carried out with the help of three single equation growth models which take following specific forms in analytical formulation: GPt= +1SXt+2AXt+3OXt+4DXt+5RXt+6FRt+7FLt+ +8RIt+9 MSt+10 Dt+ut ..3 GPt=+1SXt+2EXt+3FRt+4FLt+5RIt+6MSt+7Dt+ut ...4 GPt= +1XSt+2DXt+3XRt+4FRt+5FLt+6RIt+ 7MSt+ + 8 Dt+ut .......5 14 For example, Due to the lack of formalized trade structure between India and Pakistan, unofficial trade between these countries is estimated between 8 billion to 16 billion rupees a year, many time more than the regular and official trade [see, Wadhva 1997]. 11 Where,
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GP = Growth of Pakistans economy (growth rate of GDP) SX = Growth rate of exports to the SAARC region countries AX = Growth rate of exports to the ASEAN region countries OX = Growth rate of the exports to the countries of the Organization of Islamic Conference [OIC] DX = Growth rate of exports to the developed countries of the Organization for Economic Cooperation and Development [OECD] RX = Growth rate of the exports to the rest of the world FR = Growth rate of the net foreign workers remittances FL = Growth rate of the net disbursement of foreign loans RI = Growth rate of real interest rate Ms = Growth rate of money supply D = Dummy variable for type of government (military= 1) EX = Growth rate of exports to the entire world excluding SAARC region XS = Growth rate of exports to the South (includes only the countries of the SAARC and ASEAN regions) XR = Growth rate of the exports to the rest of the world (generated by adding exports to the OIC countries in the RX of Equation 3) The source of all data, except real interest rate, is Economic Survey of Pakistan. The data on real interest rate has been taken from the Annual Report of State Bank, published by the State Bank of Pakistan. The growth rates have been calculated by converting all values into constant market prices with 1980-81 as the base year. All three models are estimated by applying Ordinary Least Square (OLS) technique on the E-view package. The results are reported in Table 4. In Equation 3, the direction of Pakistans exports has been divided into five broad categories including four county groups, SAARC, ASEAN, OIC, OECD, while the fifth category takes into account the countrys exports to the rest of the world. Foreign loans and foreign workers remittances, another two important sources of foreign exchange for the country, have also been included in the model. In order to improve the goodness of the fit, the model additionally incorporates three exogenously determined internal sector variables, namely, real interest rate, money supply and type of the government. 12 Table: 4 External Determinants of Growth: Pakistan (1977-2002) Estimated Coefficients Dependent Variable= GP Observations= 26 Equation 3 Equation 4 Equation 5 Variable Coefficient tStatistics Variable Coefficient tStatistics Variable Coefficient t- Statistics
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Constant 1.423 1.249 Constant 2.918*** 2.737 Constant 2.223** 2.390 SXt 0.017* 1.875 SXt 0.030*** 2.810 XSt 0.047*** 4.473 AXt 0.019** 2.269 EXt -0.005 -0.183 DXt -0.010 -0.667 OXt -0.012 -0.880 FRt -0.011 -1.376 XRt -0.013 -0.815 DXt -0.012 -0.724 FLt 0.002 1.520 FRt -0.011* -1.737 RXt 0.012 1.040 RIt -0.169** -2.325 FLt 0.001* 1.642 FRt -0.013* -1.679 MSt 0.101 1.608 RIt -0.154*** -2.549 FLt 0.001 0.955 Dt 2.410*** 4.506 MSt 0.139*** 2.519 RIt -0.096 -1.244 AR(1) -0.429 -1.608 Dt 2.573*** 5.688 MSt 0.171*** 2.647 AdjustedR2=0.541 D.W.= 1.943 AR(1) -0.462* -1.773 Dt 2.591*** 4.537 Adjusted R2= 0.0.674 D.W.= 2.012 Adjusted R2= 0.639 D.W.= 2.263 F= 5.615 D.H.= 0.070 F= F= 4.679 D.H.= 0.070 F= F= 6.740 ***Significant at 1% level **Significant at 5% level of *Significant at 10% level 13 The coefficients of five variables turn out to be significant in estimated Equation 3. They include three external sector variables, SXt, AXt and FRt, and two internal sector variables, MSt and Dt. Of the former, the exports to SAARC and ASEAN countries, SXt, AXt, are positively related with the economic growth of Pakistan and the estimated coefficients are significant at ten percent and five percent level respectively. The coefficient of the variable representing the trade with SAARC countries, SXt, is 0.017. Given a very low share of exports to SAARC region in Pakistans total exports, the apparently small size of the coefficient of SXt happens to have huge significance, implying that doubling of Pakistans exports to the SAARC region is going to increase her growth rate by about 1.8 percent. The estimated coefficients of the variables OXt and DXt representing the OIC and OECD countries respectively show that exports to these country groups are negatively related with Pakistans economic growth. However important in its implications, this result is not valid since the coefficients of OXt and DXt are statistically insignificant. The variable representing exports to the rest of the
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world, RXt is not significant either, but its sign is positive. The foreign workers remittances appear to be negatively related with the economic growth of Pakistan, because the sign of the estimated coefficient of FRt is negative and statistically significant at ten percent level. The estimated coefficient of foreign loans, FLt, on the other hand, shows a positive, though statistically insignificant, relationship with the economic growth of the country. Finally, two of the three internal sector variables, MSt and Dt, turn out to have a positive and highly significant relationship with economic growth. The large estimated coefficient of the dummy variable shows that growth demonstratively increases during the military regime compared to the period when the country is democratically governed. The results of the estimated Equation 4 and Equation 5 are also reported in Table 4. It is observed that a consistency exists between the estimated coefficients of Equation 3, Equation 4 and Equation 5, since signs of the estimated variables remain unchanged. Some change, however, is observed in the significance level of the variables because of the change in formulation of the export variables. Autocorrelation was detected in the estimated Equation 4 and Equation 5 and it was removed in both cases by applying autoregressive scheme 1. Table 5 lists the alternative scenarios of growth projections for Pakistans economy between 2003-04 and 2020-21. These projections are based on the estimated Equation 4 and Equation 5. The former splits Pakistans export destination in two categories, namely, the SAARC region(SXt) and the entire world(EXt) excluding the SAARC region countries. The latter on the other hand, splits Pakistans export destination in three broad categories, namely, the South (XSt) represented only by the member countries of the SAARC and ASEAN regions; the developed countries (DXt) represented by the member countries of the OECD; and the rest of the world (XRt) represented by all remaining trading partners of Pakistan including the member countries of the OIC. 14 Table: 5 Growth Impact of Increasing and Diverting Exports to SAARC and ASEAN Region Countries Pakistan: 2004-2021 Year Growth Projections SAARC SAARC and ASEAN Military Democracy Diversion Increase Diversion Increase+Diversion Increase Diversion Increase+Diversion Military Democracy 2004 5.12 5.08 5.07 2.71 2.67 2.67 5.26 2.68 2005 5.14 5.10 5.09 2.73 2.69 2.68 5.29 2.71 2006 5.15 5.11 5.11 2.74 2.70 2.70 5.31 2.74 2007 5.17 5.13 5.12 2.76 2.72 2.71 5.34 2.77 2008 5.18 5.15 5.14 2.77 2.74 2.73 5.37 2.80
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2009 5.20 5.17 5.16 2.79 2.76 2.75 5.40 2.83 2010 5.21 5.18 5.17 2.80 2.77 2.76 5.43 2.86 2011 5.24 5.22 5.20 2.83 2.81 2.79 5.48 2.91 2012 5.27 5.25 5.24 2.86 2.84 2.83 5.54 2.97 2013 5.30 5.29 5.27 2.89 2.88 2.86 5.60 3.03 2014 5.33 5.32 5.30 2.92 2.91 2.89 5.66 3.08 2015 5.36 5.36 5.33 2.95 2.94 2.92 5.72 3.14 2016 5.39 5.39 5.37 2.98 2.98 2.96 5.77 3.20 2017 5.41 5.41 5.38 3.00 3.00 2.97 5.80 3.23 2018 5.42 5.42 5.40 3.01 3.01 2.99 5.83 3.26 2019 5.44 5.44 5.41 3.03 3.03 3.0 5.86 3.29 2020 5.45 5.46 5.43 3.04 3.05 3.02 5.89 3.31 2021 5.47 5.48 5.45 3.06 3.07 3.04 5.92 3.34 15 The first three scenarios are generated by alternatively introducing in estimated Equation 4 an increase in exports to the SAARC region, a diversion of exports to the SAARC region, and part increase and part diversion of exports to the SAARC region. The projected growth estimates are quite realistic since increase and diversion of exports when introduced separately are only of the proportion of half a percent during the first six years, 2004-2009, one percent during the next six years, 2010-2015, and half a percent in the remaining five years, 2016-2020. Similarly, while introducing increase and diversion together the same proportions are maintained in the same order for the increase, while the respective diverted proportions are 0.25%, 0.50% and 0.25%. The rationale of simulating with relatively low proportions is that, in the short-run at least, neither the economy can manage to increase the exports spectacularly and indefinitely, nor the existing structures have the ability to sustain the risk of significantly diverting the exports from the traditional markets.

It is observed in Table 5 that pure increase in exports provides slightly better results than pure diversion till the year 2016. Thereafter, the pure diversion fares slightly better than the pure increase. Although apparently the difference is negligibly minor, its implications cannot be ignored for a strategic approach to extended economic cooperation of Pakistan with the SAARC region. The argument is further supported by the projected growth rates of the scenario which introduces part increase and part diversion of Pakistans exports to the SAARC region. It is observed that the impact of such a policy is not as much favorable as is the impact with pure increase and pure diversion, though the relative difference again appears ignorable. Finally, the projected growth rate in 2021 is maximally higher than the actual growth rate in 2003 only by half a
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percent. It appears to be a small difference in absolute terms, but its relative significance is indisputable in terms of the optimality of the target and the promise which it holds out in other spheres of economic activity for extended cooperation of Pakistan and the SAARC region countries. Table 5 also lists another scenario providing useful policy guidelines in the short-run. The results reported in Table 4 for estimated Equation 3 suggest that the exports to bot the ASEAN and SAARC countries are positively related with the economic growth of Pakistan. The authors have projected the growth rates of Pakistans economy based on the estimated equation 5 which uses the combined exports to the SAARC and ASEAN region countries as one of the explanatory variables, along with separating the variation in growth caused by the exports to the OECD countries. This scenario introduces pure diversion of exports to the SAARC and ASEAN region countries from the OECD countries. The successively proportionate size of diversion over the years remains same as before. It is observed that the growth impact of exports in this scenario is about 0.16% higher than that of the scenario where the diversion is introduced only to the SAARC region countries from the rest of the world. Such an alternative is reckoned to anchor Pakistans gradual move toward greater integration within the SAARC region. 16 Finally, it is observed in Table 5 that, in terms of the growth impact of exports, military regime fares much better compared to the democratic rule in all scenarios. Given the highly significant large coefficient of the dummy variable listed in Table 4, this result is hardly unexpected. However, the implicit suggestion of such an explicit finding must not be taken for granted without considering its long-run implications, particularly in terms of the sustainability of growth in the absence of the windfalls and bonanzas frequently accompanying the military rule in Pakistan.

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Conclusion There is increasingly widening and deepening international policy integration among the developed countries of the world. Regional organizations of developing countries on the other hand, have a history of enthusiastic formation followed by dissent, resulting in either dissolution or a lapse into purely formal existence. The promise that SAARC holds out is enormous for the countries of the region. The initiative itself is now 20 years old. The organization should be in the full maturity of its youth, ready to take on new challenges and directions. But, unfortunately, SAARC carries the image of high profile and low performance, lacking concrete objectives, commitment, and even a sense of regional identity. For example, The problems of finding continuing advantages in joint development, the reconcilable and irreconcilable differences over the direction and rate of development, and the allocation of benefits among the members have not been addressed by any of the SAARC forums. Furthermore, and perhaps most importantly, while the world has entered the 21st century, the two biggest member countries of SAARC have frequently demonstrated their will to revisit and rewrite the history of the past millennium.15 It is high time that SAARC departs from its endless round of meetings, seminars, and conferences, and moves to collaborative projects that bring tangible results in terms of growth and development of the member countries. A range of clearly defined optimal objectives may add both viability and stability to SAARC. The initial advantages may be less important, but the long-term advantages are certainly overriding. Finally, the authors suggest that serious efforts should be made to generate the relevant data and formulate the trade and production models to make firm calculations at least for the immediate static effects of a custom union in the SAARC region. The ex ante calculation of these effects will certainly help move toward the target by providing pragmatic guidelines for determining the readjustment period. A workable plan essentially requires that the calculation of the static effects encompasses the effects on each member country, including each interest within a country. 15 According to Beg(1997), South Asia could be pictured as a large ground containing a number of open air theatres where ancient scenes are being continually re-enacted, not, sadly, to learn from the past but in order to avenge it.

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References Anwar T. (1996), Structural Adjustment and Poverty: The Case of Pakistan, The Pakistan Development Review (PDR), 35:4, pp. 911-26. Beg A. (1997), Options for Peace in the South Asian Region, Strategic Studies, Vol. XIX, Summer-Autumn, no. 2&3. Jaffery S. M. Younas and A. Khattak (1995), Income Inequality and Poverty in Pakistan, Pakistan Economic and Social Review, 33: 1&2, pp. 37-58. Kemal A. R. (1994), Structural Adjustment, Employment, Income Distribution and Poverty, PDR, 33:4, pp. 901-11 Kumar N. (2002), Globalization and Quality of FDI: A Quantitative Analysis of the Role of Host Country Characteristics and WTO Regime, Delhi: Oxford University Press. Kremer M. (1993), The O-Ring Theory of Economic Development, The Quarterly Journal of Economics, 108 (3). Lall S. (1999), Indias Manufactured Exports: Comparative Structureand Prospects, World Development, 27 (10): 1769-86. ______(2000), The Technological Structure and Performance of Developing Country Manufactured Exports, 1985-1998, Oxford: International Development Centre, University of Oxford (Mimeograph). Madison A. (2000), The World Economy: A Millennial Perspective, Paris: OECD. Mayer J.R., and A. Wood (2000), South Asias Export Structure in a Comparative Perspective, IDS Working Paper 91, Sussex: Institute for Development Studies. Sinha R. S. (2001), Post-reforms Export Growth in India: An Exploratory Analysis, RIS Discussion Paper No. 13, New Delhi: Research and Information System for the Non- Aligned and Other Developing Countries. Viner Jacob (1950), The Custom Union Issue, New York: Carnegie Endowment for International Peace). Wadhva C. D. (1997), Economic Cooperation Within Asia and With Special Reference to South Asia, Strategic Studies, Vol. XIX, Summer-Autumn, no. 2&3.

1. ^ " A Brief on SAARC . " South Asian Association for Regional Cooperation . No date.

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2. ^ Charter of the South Asian Association for Regional Cooperation, Article 1. 3. ^ " South Asia : Afghanistan Joins World ' s Largest Regional Grouping ." Radio Free Europe / Radio Liberty] , 3 April 2007 . 4. ^ Waliur Rahman . " US and S Korea to observe SAARC ." BBC News , 11 April 2008. a b 5. ^ " SAARC to grant observer status to US , S Korea , EU ." Hindustan Times. 2 August 2006. 6. ^ " Iran requests for observer status in SAARC . " People's Daily, 5 March 2009. 7. ^ a b c "Memorandum of Understanding on the Establishment of the Secretariat . " South Asian Association for Regional Cooperation , 17 November 1986. 8. ^ colombopage . com 9. ^ a b thehimalayantimes.com 10.^ island.lk 11.^ SAARC hi nations call for transparency in social Sector Thaindian News 12.^ http ://www.maldivestraveller.mv/news/local/president-of-maldivesinvites-indian-pm-to-the-17th-saarc-summit/665/ 13.^ http://www.thehimalayantimes.com/fullNews.php?headline=Nepal+to+h ost+18th+SAARC+meet&NewsID=308667 SAARC Youth - [1] External links

Official SAARC website Internet Mapping for SAARC Digital Atlas of SAARC by C oopslite technologies SAARC Youth

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